After the crypto lending platform Celsius halted operations on June 12, at 10:10 p.m. (ET), two days later the Wall Street Journal (WSJ) quoted “people familiar with the matter” who said Celsius was hiring restructuring lawyers. At the time, the WSJ said Celsius was looking to hire the bankruptcy and restructuring law firm Akin Gump Strauss Hauer & Feld LLP. However, a new report from the WSJ claims sources say that Celsius is now working with the restructuring advisory firm Alvarez & Marsal.
Sources say Celsius may collaborate with restructuring consultancy
The current financial situation of crypto credit company Celsius is still unknown and as of June 12, people still suspect that the company is insolvent. Bitcoin.com News reported on the rumors and speculation surrounding the company as of today and on June 13, crypto lending company Nexo Free to buy Celsius-based assets.
The reason why people suspect that Celsius is having financial hardships is because of the company’s tweet on June 12. “Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, swaps, and transfers between accounts,” Celsius revealed. There’s also been speculation about Celsius having 17,919 WBTC leveraged in Maker protocol that faced liquidation.
On June 14, a WSJ report indicated that Celsius was seeking to hire restructuring law firm Akin Gump Strauss Hauer & Feld LLP. “People familiar with the matter” explained that Celsius was first trying to get help from investors. At the time, Akin Gump did not comment on the matter when asked if the company was involved in Celsius. Now, another WSJ report says Celsius may be collaborating with restructuring consultancy Alvarez & Marsal.
People Familiar With the Matter Claim Goldman Sachs Has Eyes on Celsius Network Assets
Additionally, Coindesk’s Tracy Wang reported that “Goldman Sachs is looking to raise $2 billion from investors to buy up distressed assets from troubled crypto lender Celsius.” Wang detailed that the information stemmed from “two people familiar with the matter.” The report goes on to explain that the two sources said the proposed Goldman Sachs deal “would allow investors to buy up Celsius’ assets at potentially big discounts in the event of a bankruptcy filing.”
A Reuters report further clarified that the U.S. Securities and Exchange Commission (SEC) and state regulators were investigating Celsius over the account freeze. Other accounts said Akin Gump and financial giant Citigroup told Celsius they had recommended it file for bankruptcy. The report that discusses the alleged recommendation from Akin Gump and Citigroup says both companies declined to comment on the matter.
After Celsius paused withdrawals, there haven’t been many words from the company except a blog post that tells the Celsius Network community that the company’s “objective continues to be stabilizing our liquidity and operations.” Celsius added that the “process will take time” but the post does not detail what type of process it meant. In the comment section, Celsius is criticized a great deal over the issue.
“Basically, you haven’t added anything to what you’ve already said. Which is, in and of itself, already very little,” one person wrote in response to the company’s statement. “The lack of transparency is very concerning,” another person said. “Choosing Celsius was the worst choice of my life,” an average user called “Crypto Cooper” wrote five days ago. CEL, the native token of the Celsius network, is down 80.9% in the past 12 months and 86.3% below the asset’s all-time high.
