Celsius hires restructuring lawyers to help ease its financial woes

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Crypto lending platform Celsius has hired a legal team to advise on restructuring its business after facing liquidity issues, The Wall Street Journal reported, citing sources with direct knowledge of the matter.

Sources told the newspaper that Celsius hired lawyers from Akin Gump Strauss Hauer & Feld LLP to get advice on how to tackle its mounting financial problems. One of the people familiar with the matter said the company’s first option is seeking possible financing from investors. Should this approach fail, Celsius is eyeing alternatives like financial restructuring.

The news comes after Celsius halted withdrawals, swaps, and transfers on its platform on June 12, citing extreme market conditions. The move triggered a crash that saw most cryptocurrencies trade at their lowest levels since January 2021.

Celsius (CEL), the native token of the Celsius Network, traded as low as $0.0935 on June 13. It regained some of the losses and traded above $0.30 for the remainder of the day.

On June 14, CEL’s price shot up 500% and traded as high as $2.56 on FTX. Several other exchanges, including BitFinex, Gate.io, and OKEX, experienced pumps of smaller magnitudes.

However, these gains were short-lived, and the token quickly slumped below $1. At the time of writing, CEL is trading at $0.49, a 52.14% gain in the day. The price denotes a 94% drop from the token’s June 4, 2021, all-time high (ATH) of $8.03.

Celsius is yet to consider Nexo’s acquisition offer

Following Celsius Network’s insolvency scare, Nexo stepped up and extended a helping hand. The Nexo team offered to acquire Celsius’ assets, claiming that it was only looking out for the best interests of Celsius users and the broader crypto ecosystem.

In its Letter of Intent, Nexo specified that it was interested in acquiring all or part of Celsius Network’s qualifying assets. These comprise collateralized loan receivables secured by collateral assets, brand assets, and Celsius’ customer database.

Celsius is yet to accept Nexo’s unsolicited offer. Meanwhile, the company continues reassuring customers that it is working with their best interests.

Yesterday, the Celsius team tweeted:

.@CelsiusNetwork is working as quickly as possible and will share information as and when it becomes appropriate. Acting in the interest of our community remains our top priority.

— Celsius (@CelsiusNetwork) June 14, 2022