April 21, 2024

Celsius hires new team of lawyers for debt restructuring

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Celsius hires new team of lawyers for debt restructuring

Cryptocurrency lender Celsius, facing bankruptcy, has hired a new law firm to restructure its debt.

Sources familiar with the matter told WallStreet Journal that Celsius has stopped working with lawyers from Akin Gump Strauss Hauer & Feld LLP, and hired lawyers from Kirkland & Ellis LLP.

The company offered clients highly profitableloans up to 18% on deposits. However, in June, faced with liquidity issues, Celsius suspended withdrawals, assuring users that they would “continue to receive rewards.”

“We are taking these necessary actions atfor the benefit of our entire community, to stabilize liquidity and operations while taking steps to preserve and protect assets. We are working hard to fulfill our obligations,” Celsius said.

During the crisis, Celsius lost assets by$350 million because it used $534 million in client deposits to implement “high-risk, leveraged cryptocurrency trading strategies” through a third-party asset manager. 

Although Celsius did not apply forbankruptcy, she faced growing customer concerns about her solvency. Merger with Kirkland & Ellis LLP may indicate a change in overall strategy to resolve the issue.

Let us remind you that last week the cryptocurrencylending service Celsius transferred 25,000 wBTC tokens worth $528 million to the FTX exchange. The community fears that Celsius will sell tokens and crash the Bitcoin rate.