Celsius is said to have recruited attorneys to assist with the platform’s restructuring in the hopes of reviving it. It is one of the most well-known cryptocurrency lending platforms.
The platform has been having some difficulties due to the current market conditions, which has resulted in the company freezing user accounts. Withdrawals, swaps, and transfers between accounts have been put on hold. The platform cited harsh market conditions as the rationale for the move in a blog post.
The situation has deteriorated to the point where the board appears to have lost faith in Alex Mashinsky, prompting them to make the decision. Celsius recruited restructuring counsel from the law firm Akin Gump Strauss Hauer & Feld LLP, according to a Wall Street Journal article.
It was most likely done to address the current financial challenges, which appear to be growing.
Celsius is seeking new funding options
Celsius is first looking for new funding possibilities from investors, according to one of the people familiar with the matter. Other strategic options, such as financial restructuring, are also considered.
To make money, the platform mostly depends on lending out user deposits. Celsius had amassed and managed over $11.8 billion in assets as of May 17. It has over 1.7 million members who can earn up to 18.63 percent on cryptocurrency deposits.
The decision by Celsius to suspend its platform aroused criticism and raised the potential that it would follow LUNA’s lead. The team may be making hasty decisions in order to avert a calamitous collapse. CEL, which had dropped precipitously, has recovered and is now trading at $0.4839, up by almost 50 percent in the last 24 hours.