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Celsius faces restructuring: lawsuit filed against crypto network

 


5 days ago, crypto service provider Celsius suspended withdrawals from its customers. Users fear for their money, even a lawsuit is brought.


We now count 5 days when users fear for their money and cannot make withdrawals. Instead of high interest income, a restructuring of the Celsius network is said to be imminent .


According to insider circles , Celsius asked the law firm Akin Gump Strauss Hauer & Feld LLP, which specializes in restructuring, for help . Those insiders are said to have told The Wall Street Journal that Celsius is considering alternative funding from investors along with a structural change.


The law firm has successfully averted insolvencies in the past, such as those of NAC – one of the largest aircraft lessors. For this achievement, the law firm received an award from the Global Restructuring Review, a leading medium in this field.



CEO Alex Mashinsky confirms on Twitter that the network is going through tough times. Another medium claims to have received information from internal sources about a cooperation between Celsius and the bank Citigroup. The bank is one of the four largest banks in the United States, alongside Bank of America, JPMorgan Chase and Wells Fargo.


In the role of consultant, Citigroup Celsius is now supposed to bail out, but it is not clear whether money will flow for this. The Block cites the internal source:


"It's not like Citi would just give money off the balance sheet to Celsius."


The advisory function should primarily serve the further steps in connection with the financing. In addition, an offer to take over the remaining assets, which was made by competitor Nexo, is still open. According to the insider, Citigroup and Celsius already know each other from previous consultations: The bank is said to have already helped the crypto company with its mining subsidiary and initial coin offering.


The network managed approximately $12 billion in assets as of mid-May.


YouTuber files lawsuit against Celsius network

Crypto YouTuber Ben Armstrong is even ready to go to court! According to his Twitter post, the platform won't let him withdraw funds without first transferring new funds:


Ben Armstrong, founder of @Bitboy_Crypto said that Celsius won’t let him withdraw money from the platform without sending more money to it first.


This has led to the founder taking it to Twitter threatening a lawsuit against Celsius.


⚖️https://t.co/okyzSELkKO pic.twitter.com/bjErZDgvN6


— CoinGecko (@coingecko) June 16, 2022

The YouTuber is preparing to file a lawsuit against Celsius Network and its CEO Alex Mashinsky today. Users could already have guessed that the company would not like its Twitter posts. The YouTuber was warned by email not to tweet further against the company.


There is now good news from the American Senate. There, two senators are said to have introduced a proposal to protect investors in the event of insolvency of a crypto company. According to this, investors' money should no longer be confiscated in the event of insolvency.


Just a few weeks ago, Coinbase announced that investor assets would be part of the bankruptcy process in the event of bankruptcy. The Coinbase CEO then reiterated that the company is not at risk of bankruptcy.


Disclaimer

All information contained on our website has been researched to the best of our knowledge and belief. The journalistic contributions are for general information purposes only. Any action that the reader takes based on the information found on our website is entirely at their own risk.

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