Celsius Network has hired restructuring lawyers for consultation regarding their current financial challenges.
Note that four days ago, the crypto lending colossus announced that it had paused all withdrawals due to the prevailing market crisis. The freeze continues indefinitely while Celsius makes aggressive measures to help its case.
Celsius Takes Frantic Measures
Sources familiar with the matter told The Wall Street Journal that the new attorneys are from the law firm Akin Gump Strauss Hauer & Feld LLP.
Additionally, they noted that the company is seeking help from its investors other than financial restructuring. The firm was one of the crypto lending firms offering attractive yields of up to 18.63% annual percentage yield (APY). There were concerns about the sustainability of this framework, but those were never addressed at the time.
However, now that the crypto market is in free fall, it may have to reorganize its rewards system to a more sustainable one. Its latest Twitter communication reads:
“.@CelsiusNetwork is working around the clock for our community. It’s all hands on deck, so there will be no Twitter Spaces this week.”
The firm has also cautioned that the so-called CEL2.0 token is not its creation, rather it is likely a scammer seeking to profit from its current crisis.
As for its position in the market, Celsius has added 6,000 Wrapped Bitcoin (WBTC) to the DeFi platform MakerDAO to lower the price at which it could be liquidated.
Should Celsius fail in its saving operations, it may have to consider a Monday offer that rival platform Nexo made. The firm sent Celsius a letter, offering to acquire all its assets since, as it said, it has robust liquidity. This might also mean taking up Celsius’ 1.7 million customer base.
Meanwhile, another rival to the two, BlockFi, faces $943,000 million in penalties for improper registration of its platform. Celsius and Nexo are yet to register with US financial regulators, drawing concerns if they may experience similar issues in the future.
After the Celsius drama, SEC Chair Gary Gensler asked investors to be cautious of platforms that offer returns that are “too good to be true.”. Even more, several senators put forward a crypto bill last week, aiming to cushion investors in the event a crypto firm becomes bankrupt.
CEL, the native digital token of the Celsius Network, is nonetheless showing signs of recovery. As of reporting time, CEL was trading at $0.53, up 67.8% in the last 24 hours.