According to “two people familiar with the matter,” the cryptocurrency lending company Celsius is working with the financial giant Citigroup in order to get advice on how to handle the firm’s financial hardship. The sources note that Citigroup was hired by Celsius to help the company find “potential financing.”
Sources say Celsius is seeking help from Citigroup
Three days ago, Bitcoin.com News reported on the cessation of withdrawals by crypto credit firm Celsius, as well as speculation and rumors surrounding the company. Speculators believe the startup could be insolvent as the company has been very quiet about what is going on.
On June 15, after a few days of silence, Alex Mashinsky, the CEO of Celsius, tweeted about the situation. “[The Celsius] team is working non-stop. We’re focused on your concerns and thankful to have heard from so many,” Mashinsky said. “To see you come together is a clear sign our community is the strongest in the world. This is a difficult moment; your patience and support mean the world to us.”
Bitcoin.com News also reported that the company was reportedly looking for restructuring lawyers. A Wall Street Journal report, citing “people familiar with the matter”, explained that Celsius was working with law firm Akin Gump Strauss Hauer & Feld LLP. The two companies declined to say whether a restructuring was planned or not.
Furthermore, Ben Armstrong — also known as “Bit Boy” on Youtube — is allegedly bringing a class action against Celsius. “Today we will begin the process of bringing a Class Action Lawsuit against [Celsius Network] and [Alex Mashinsky],” Armstrong said.
On Wednesday, The Block reported that Celsius may seek help from Citigroup. Two sources “familiar with the matter” indicated that the financial giant is hired in an “advisory capacity” and the source claims that Citigroup does not offer Celsius funds. “It’s not like Citi is going to take Celsius money off its balance sheet,” the source said.
According to The Block author Yogita Khatri, the news publication reached out to Citigroup and the financial firm declined to comment. So far, it’s been over three days since Celsius halted withdrawals, and customers have not had access to their funds since the downtime started. Celsius has published a “Community FAQ” that discusses how customers can handle specific claims like loans. “For assistance, please direct your inquiry to [email protected],” the company’s FAQ details.
