Users and operators of the crypto lender Celsius Network (CEL) are not at the end of their sentences: lawyers specializing in restructuring operations have been called in to implement emergency measures. Meanwhile, the price of CEL continues its seesaw trajectory.
The news, reported by The Wall Street Journal, comes after the lender faced mass liquidations, insolvency questions and threats of legal action. On Monday, the company suspended swaps, withdrawals and transfers between accounts as markets shuddered, sparking fury from investors.
The WSJ cites “people familiar with the matter,” who say Celsius “engaged the law firm Akin Gump Strauss Hauer & Feld in order to remedy its growing financial problems as quickly as possible”.
The outlet suggested restructuring remains the worst-case scenario for Celsius, which “appears to be exploring possible financing options with investors.” However, other strategic alternatives are being studied, according to the statements of one of the interviewees.
Both the law firm and Celsius executives declined requests for comment from the WSJ on the matter.
Social media watchers claimed that Celcius could file for bankruptcy. The work of restructuring lawyers often focuses on bankruptcy proceedings, but it can also cover a range of other financial matters, including new investments and debt rescheduling.
Earlier this week, Celcius declared that he was “acting in the interest of our community”, which was his “top priority”.
Amid the confusion, a fake token claiming to be associated with a restart of the Celcius network has also made his appearance and multiple rumors spread about the high number of large crypto transactions made by the firm before or around the time of the announcement of the suspension of withdrawals.
On Reddit, a community member r/CelciusNetwork lamented that a potential lawsuit could mean long-term inconvenience for investors:
“It could take years to sort out now.”
During this time, Adam Levitinprofessor of law at Georgetown University Law Centermade dire predictions about what might happen if Celcius filed for bankruptcy, writing that “all Celsius overseas customers as well as all domestic customers who chose to use the Earn product” have effectively “provided loans to Celsius “.
He has writing :
“That means they are unsecured creditors of Celsius. And they are going to get screwed. been paid (lawyers, financial advisors). It’s not a happy prospect”.
He added that “the current exercise is simply to mitigate losses and prepare for the storm of litigation that lies ahead.”
And the lawyer Grant Gulovsena cryptocurrency specialist, has affirmed that while filing for bankruptcy might be “convenient for the directors and officers of Celsius”, it would not be for the “counterparties who would likely prefer that the terms of their various agreements with Celsius remain out of public view. “
The price of CEL remains exceptionally volatile. As of 07:27 UTC, the token, now ranked 138th by market capitalization, was trading at $0.52 after crashing from the briefly hit $1.42 earlier in the day. The price is still up almost 66% in the last 24 hours, but down 23% in the last week and 48% in a month, however – amid a crypto crash that engulfed most major crypto-assets.
Evolution of the price of CEL:
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