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Celsius Network, one of the world’s largest cryptocurrency lenders, has filed for bankruptcy as a wave of digital asset companies froze customer assets and began restructuring amid a sharp sell-off. cryptocurrencies this year.

The Hoboken, New Jersey-based company’s Chapter 11 bankruptcy filing in federal court in New York comes about a month after Celsius froze its clients’ assets, trapping billions of dollars over more one million accounts.

The court filing listed between $1 billion and $10 billion in assets and the same amount in liabilities, and more than 100,000 creditors.

As cryptocurrencies plunged in value in 2022, lenders offering high-yield cryptocurrency loans faced cash shortages and customer buyouts, putting them on a fragile financial footing. Some reacted by blocking customer withdrawals, raising funds at ridiculous prices or initiating restructuring proceedings.

Celsius said its filing would be an “opportunity to stabilize its business” and undergo a restructuring “that maximizes value for all stakeholders”.

“Today’s filing follows Celsius’ difficult but necessary decision last month to suspend withdrawals, trades and transfers on its platform to stabilize its business and protect its customers,” a committee said. special from the Celsius Board of Directors in a press release.

If Celsius hadn’t restricted withdrawals, he said he would indeed have experienced a run on his deposits. Customers who would have been the first to withdraw their assets would have been paid in full, leaving others with illiquid and less certain claims, the company said.

“This is the right decision for our community and our business,” said Alex Mashinsky, CEO of Celsius, in the press release.