Celsius has reportedly filed for Chapter 11 bankruptcy, with its lawyers starting to notify individual U.S. state regulators.
The news was referred to an unnamed source, who asked not to be named as the proceedings were private. They said that the company planned to file the Chapter 11 paperwork.
It comes just days after the embattled lending platform replaced its previously hired law firm Akin Gump Strauss Hauer & Feld LLP with Kirkland & Ellis LLP, the same firm that assisted Voyager Digital with its bankruptcy filing last week.
Celsius closed off the last of its DeFi debts owed to Compound, Aave, and Maker, reducing its initial debt of $820 million to just $0.013 over the course of a month.
the fate of depositors who still have their assets locked up on the lending platform is still unknown. Neither the company nor its CEO Alex Mashinsky has made any public comments about whether depositors will receive any percentage of their funds back.
Rumors of Celsius’ insolvency began circulating last month after the crypto lender was forced to halt withdrawals due to “extreme market conditions” on June 13.
