According to the Wall Street Journal, Celsius hired the law firm Kirkland & Ellis LLP to advise it on its restructuring process. It aims to mitigate the widespread collapse of the crypto market.
A restructuring is a court-approved plan in which a business restructures to pay creditors within its means. Lump sum payments, board changes, M&A processes, transfer of rights and other solutions may be considered.
The law firm Kirkland & Ellis LLP serving Celsius
Kirkland & Ellis LLP replaces Gump Strauss Hauer & field LLPa law firm engaged by Celsius to advise it after the cessation of its activities in order toavoid a liquidity crisis. Celsius’ business model is based on lending cryptocurrencies and offering high interest rates to those who provide liquidity through committed funds. A large part of its commercial proposition is linked to the Lido. On this platform, users can participate in staking ETH without providing the 32ETH required to become a true validator Ethereum.
On Lido, users bet ETH and in return they receive a token called stETH. OnceEthereum proceeds to proof of stake, each stETH can be exchanged 1: 1 against ETHbecause each validator of the new blockchain Ethereum receives ETH in return. Currently, it is not possible to release funds pledged on the pledge agreement ETH2.0.
Bonus: Celsius is being sued by his former asset manager, accusing him of a Ponzi scheme.
There is a large amount of stETH in Celsius reserves. However, after a fit of panic and a delay in announcing the launch ofETH 2.0, stETH has lost parity and started selling at a reduced price. The gap is so large that Celsius has suspended withdrawals due to lack of liquidity due to massive redemptions. This in turn caused the price of its own token to plummet. So she ended with a restructuring process as she tried to meet her financial obligations.
Celsius wants to regain its credibility again.
Celsius has started to recover, and there are signs that he wants to survive the winter crypto rather than suffer the fate of other giants like Three Arrows Capital Where Travel Digital. Despite the losses, Celsius began to reduce risk, repay many debts and implement strategies to improve the efficiency of its resource management.
Celsius laid off 150 employees in non-strategic areas earlier this month. Other crypto companies that have laid off employees include Coinbase, Crypto.comBlockfi, Huobi and Geminito name a few.
Additionally, Celsius began to repay its debt, in particular to MakerDAO. He first paid $120 million, then made a series of payments until he paid off his debt and demanded nearly $22,000. wBTC in return. The funds were then sent to FTXwhich sparked rumors of a possible sale to pay off the rest of its debt, driving the price down.
