Crypto lender Celsius said on Monday it is “pausing” its Twitter and Reddit spaces to focus on its debt restructuring, as withdrawals remain suspended.
The lender said in a blog post that it is in open dialogue with regulators and officials over when it could possibly resume withdrawals. On that front, it said the “process will take time.”
Celsius’ comments mark a week since the lender- one of the largest in the space- suspended withdrawals, swaps, and transfers, due to a severe liquidity crunch.
Focus now turns to how the lender may be able to navigate its liquidity woes and potentially return customer funds.
Celsius to keep withdrawals suspended indefinitely
Based on the wording of Celsius’ recent announcement, it appears that withdrawals from the platform are likely to remain suspended indefinitely.
Reports suggest that the firm has hired restructuring lawyers, and has potentially appointed Citigroup as a financial advisor on the restructuring.
A restructuring is usually the first step taken by a firm to find a way to repay its debtors without becoming insolvent. It is unclear where Celsius’ customers stand in this process, given that the firm has taken several highly leveraged loans.
While these loans were manageable when market conditions were favorable, a recent crash in crypto prices caused several of Celsius’ positions to be liquidated.
A drop in Lido Staked Ethereum (stETH) prices was the latest blow to the crypto lender, which was also exposed to the Terra meltdown.
Major shareholders chime in
Bnk To The Future, an online investment platform that claims to be a major shareholder in Celsius, said it supports a recovery plan for Celsius.
The firm has offered to lay out a recovery plan for the crypto lender, according to a blog post by CEO Simon Dixon.
The firm claims to have over 1000 customers exposed to the Celsius debacle, and that Dixon could see a hit to his personal finances if Celsius becomes insolvent.
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