At the bankruptcy hearing on Monday (July 18), attorney Patrick Nash of Celsius told the judge that “all is still salvageable” as the company looks forward to reconstruct instead of liquidation.

Celsius Network start restructuring

In the first bankruptcy petition, revealed the company lost about $1.19 billion and owed its customers $4.72 billion on its balance sheet.

Lending organization over 1.7 million users filed for bankruptcy on July 13, exactly one month after halting customer withdrawals citing “extreme market conditions”. In the United States, Chapter 11 is a form of bankruptcy related to a debtor's business restructuring, in which the debtor is allowed to continue operating while the business is restructured.

Emphasizing this point in the first bankruptcy hearing, attorney Patrick Nash of  speak that the lending company is still in good shape.

In one slide version announced on Celsius' bankruptcy website, the company recorded a loss of $1.19 billion on its balance sheet. Specifically, as of July 14, Celsius had total liabilities of $5.5 billion — $4.72 billion of which owed to customers — while only $4.31 billion in assets. To reassure customers, Celsius plans to give them the option to withdraw “cash but at a discount” or “remain ‘long’.” ".

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“The majority of our customers will be interested in getting through this crypto winter, staying long in crypto,” Nash said during the hearing, noting that users will have the opportunity to withdraw their entire cryptocurrency. their asset set “through valuation in the crypto macro environment.” This means Celsius is hoping the bull market will increase the nominal value of total assets, allowing it the ability to fully reimburse its customers.

According to Celsius terms of use, customers of the “Earn – Earn” and “Borrow” programs have legally transferred ownership of their coins to the lender upon deposit, giving them full authority to “use, sell, pledge and redefine coins”. This means that Celsius depositors can be treated as unsecured creditors in the event of insolvency and possible liquidation.

Also in the bankruptcy filing, Celsius CEO Alex Mashinsky admitted that the company made investment decisions that, in retrospect, prove to be unfavorable.

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