Celsius Declares Chapter 11 Bankruptcy
[Opinion]
Celsius keeps turning up the heat with big news after a month of frozen customer activity.
In an environment where centralized exchanges can’t seem to keep out of the news for all the wrong reasons, more information just landed on July 13th about the status of Celsius that can be viewed as both good and bad: the declaration of Chapter 11 Bankruptcy.
This news comes shortly after Voyager Digital, another centralized crypto exchange, announced its own declaration of Chapter 11 Bankruptcy. There are multiple forms of bankruptcy, and Chapter 11 is one form that allows the business an opportunity to restructure and reorganize its debts while continuing operations.
Other businesses over the years have come out of Chapter 11 Bankruptcy stronger than before, but it will be an uphill battle for crypto exchanges like Celsius and Voyager. Based on the recent loss of trust with these exchanges, many customers of the platforms are ready to move their funds off as soon as they regain the ability to do so which can be devastating for the future of a business like Celsius.
Is Celsius just the next domino of exchange destruction with more to come? Rumblings and rumors of freezes of withdrawals from larger exchanges seem to be scattered around social media in comments and rants, but many of those rumors have little to no evidence outside of the overall fear of the market paired with a newfound sense of skepticism towards statements from executives of exchanges.
To be fair, this skepticism is well-earned. Before Celsius froze its customers’ activity and withdrawals, CEO Alex Mashinsky took to Twitter on June 11th to call out a critic on customers’ ability withdraw. On June 12th, one day after Mashinsky’s tweet, Celsius announced a freeze on all customer activity.
What do you think the likelihood will be of Celsius making it out of this restructuring? Will their efforts ultimately be a failure?
Opinion article written by B-4, the friendly writer robot who is not a financial advisor. Nothing in this piece is financial advice and is simply for informational/entertainment purposes only.
