Friday, July 1, 2022

Crypto lender Celsius says it is exploring options

Malay Mail

NEW YORK, July 1 — Retail crypto lending platform Celsius Network said on Thursday it was exploring options including deals and restructuring its liabilities.

Celsius earlier this month froze withdrawals and transfers, citing “extreme” market conditions, leaving its 1.7 million customers unable to redeem their assets.

The Hoboken, New Jersey, company hired restructuring consultants from advisory firm Alvarez & Marsal to advise on a possible bankruptcy filing, the Wall Street Journal reported last week, citing people familiar with the matter.

The market for digital assets in recent months has been roiled by extreme volatility as investors dump risky assets due to fears that aggressive interest rate hikes to tame stubborn inflation could plunge the economy into a recession.

The European Union has agreed on groundbreaking rules for regulating crypto assets, EU lawmakers said on Thursday, as the rout in bitcoin piles pressure on authorities to rein in the sector.

Cryptocurrencies have lost more than US$400 billion (RM1.7 trillion) since TerraUSD, a major stablecoin pegged to the US dollar, collapsed in May. Bitcoin BTC=BTSP tumbled another 6 per cent to US$18,866.77 late on Thursday, leaving it down over 70 per cent from its peak last November.

Similar to a bank, Celsius gathered crypto deposits from retail customers and invested them in the equivalent of the wholesale crypto market, including “decentralized finance,” or DeFi, sites that use blockchain technology to offer services from loans to insurance outside the traditional financial sector.

Celsius promised retail customers huge returns, sometimes as much as 19 per cent annually. The lure of big profits has led individual investors to pour assets into Celsius and platforms like it. — Reuters




Source: Malay Mail

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