Celsius Bankruptcy filing.
Not long ago, Celsius a crypto lending company went on to declare for bankruptcy. The crypto lending company was massively hit by the crypto market plunge which occurred in May. The company went on to freeze the accounts of the investors in June and reasoned the extreme market conditions for the decision. The decision by the company sent chills and tremors among the investors whose holdings were stuck with the company.
Last week, Celsius went on to file for bankruptcy due to the current market conditions. Celsius assessed its resources and obligations to be between $1 billion and $10 billion in a court filing in the U.S. Bankruptcy Court for the Southern District of New York, with more than 100,000 creditors. $167 million in cash is on hand at the business.
As the company went on to file for Bankruptcy, panic started creeping in among the investors in regards to the holdings that was stuck with the company. As the company has several different types of programs enlisted, the investors who have enrolled in different programs are actually in panic with dilemma whether their investment is with them or not.
The different services and Terms of Service offered by Celsius!
In the Terms of Service (TOS) it is clearly mentioned that, the investors from the Earn Program and Borrow Program have actually given away the title of their crypto investments to the company and no longer have the say on how the investment has to be used.
In contrast, the custody program actually gives the investors the say to the company on how the investment be used. The company cannot take any kind of action without revealing about it to the investor.
The lawyers of the crypto lending platform say that, as per the TOS, the investors who are from the Earn Program and Borrow Program have transferred the title of their coins to the firm and as a result Celsius is free to use, sell, pledge and rehypothecate those coins.”
In the current situation, Celsius certainly doesn’t look good from the outside. A filing of bankruptcy for any company under any circumstance is not good. But, the fact that, certain investors who are from the earn program and borrow program don’t even have their say just adds more to the misery. In general circumstances, it would be appropriate for Celsius to wait before using the investments of the customers but, all said and done, it’s the company that has to decide whether it wants to sell the holdings or not.