Less than a month after it paused withdrawals for customers, crypto lender Celsius has put new lawyers at the helm of its restructuring process, according to the Wall Street Journal.
Citing “people familiar with the matter,” the WSJ reported that Celsius hired lawyers from Kirkland & Ellis LLP, replacing ones from Akin Gump Strauss Hauer & Feld LLP hired last month in the wake of Celsius halting operations.
In June, the New Jersey-based firm seized up under liquidity pressures, locking 1.7 million users out of their accounts, according to the company’s website. Leading up to the pause, Celsius offered customers high-yield loans of up to 18% on deposits and maintains its users “will continue to accrue rewards” during Celsius’s downtime.
Celsius Tanks 70% in 1 Hour After Company Pauses Withdrawals to 'Stabilize Liquidity'
On Sunday night, with crypto markets already in freefall, controversial crypto lender Celsius announced it was suddenly pausing all customer withdrawals, swaps, and transfers. "We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations," the company wrote in a blog post on Medium. "We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and p...
“We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets,” Celsius said on June 12. “We are working diligently to meet our obligations.”
Celsius isn’t the only crypto platform working with Kirkland & Ellis—Voyager Digital, which filed for chapter 11 bankruptcy in the Southern District of New York last week, also has hired the firm.
Celsius Lost $350M of Client Funds From ‘High-Risk’ Levered Trading: Arkham Report
The troubled crypto lending firm Celsius reportedly used its customers’ funds worth $534 million to execute "high-risk leveraged crypto trading strategies" through a third-party asset manager, a new report by blockchain analytics firm Arkham Intelligence says. The report, which uses on-chain analytics, also indicates that these strategies “resulted in apparent losses of $350 million when the asset manager returned capital,” corresponding to $210 million at current prices. Those crypto assets, as...
Voyager’s customers sought to withdraw funds from the company following Celsius’ decision to freeze accounts, according to court documents reviewed by the WSJ.
Although Celsius has not filed for bankruptcy, the embattled lender faces mounting questions over its solvency and pairing up with Kirkland & Ellis LLP could indicate a shift in overall strategy.
