Just as the cryptocurrency community was starting to process Terra’s abrupt demise as a major crypto lender, Celsius made the decision to halt withdrawals. The network promptly filed for Chapter 11 bankruptcy after that. Since its clients were unable to retrieve their money, the bankrupt company experienced severe reaction. Many other crypto companies who operated in a similar way then declared bankruptcy. While attention switched to these other companies, Celsius was once more in the news.
Not very long ago, it was made public that an ad hoc organization requested that the Southern District of New York of the New York Bankruptcy Court allow the repayment of their funds. The group apparently consisted of 64 people who collectively possessed $22.5 million in cryptocurrencies on the platform.
This 64-member squad is not the first to look for stranded funds, it should be mentioned. The Unofficial Committee of Creditors [UCC] is not the most recent committee to be established to combat Celsius.
Celsius network CEO plans resurrection
The CEO of Celsius Network has started to lay out a strategy for the company’s revival. Because to the significant crypto crisis in the spring of 2022, Celsius filed for bankruptcy back in July of that year.
In a meeting on 8 September 2022, CEO Alex Mashinsky spoke with the network staff members. According to a recording of the meeting provided to the New York Times, he laid forth a strategy for the firm’s rebirth. He and Oren Blonstein, another Celsius executive, declared in the meeting that they intended to restructure the business with a focus on custody, which entails holding customers’ cryptocurrency and then charging fees for specific kinds of transactions.
The future project is reportedly known by the code name “Kelvin,” which is named after the temperature unit. Blonstein and Mashinsky’s decision to use this name is unknown.
Users were owed as much as $4 billion by the firm when it filed for bankruptcy. The company let numerous staff go during the summer. Regulators in Canada and the United States both looked into it. The CEO of the network thinks that the bankruptcy filing would simply be a minor blemish on the network’s reputation. Celsius started restructuring quickly after filing for bankruptcy.
Mashinsky is quoted as saying, “delta filed for bankruptcy while comparing Celsius Network to businesses who have previously declared bankruptcy. Do you avoid using Delta because of their bankruptcy filing?