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Celsius files bankruptcy in the US, a month after it froze its withdrawals

Updated: Aug 28, 2022

By Hayfa Ashraf

Celsius halted the withdrawals in June. The main idea was to reorganize in a way that would maximize value for all parties, and that it has $167 million in cash to take care of immediate requirements in the interim.

As the Federal Reserve rapidly raises interest rates, harming risk and driving up funding costs, the pressure on cryptocurrency platforms has increased. Accordingly, if the suspension hadn't occurred, “the acceleration of withdrawals would have allowed certain clients, those who were first to act, to be paid in full while leaving others behind to wait for Celsius to recoup value through longer-term asset deployment operations.”

Customers who agreed to lend their cryptocurrency would receive returns of more than 18% from Celsius. It then lent these coins to institutional investors and took part in decentralized finance.


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