Celsius is still losing money to its investors despite the fact that the startup has failed cryptocurrency lending. Customers’ withdrawals were frozen.
Celcius Market Cap Capsid 86%
As the company’s problems worsen, investors have stepped out to relate their experiences following the withdrawal freeze and the ensuing bankruptcy application. Celsius’s entire portfolio was lost by a user who put all of their life savings in it.
The situation of the investors affected by the uncertainty surrounding when business will resume as normal is further complicated. Even though Celsius voiced optimism about allowing withdrawals, the most recent developments continue to dash investors’ hopes.
The firm’s issue also seems to have played a role in the native token CEL’s notable capital outflows. According to CoinMarketCap, CEL’s market value has dropped by 85.84% year-to-date in 2022, from $1.06 billion on January 1 to $0.15 billion on July 14.
CEL market cap Year to Date Source: CoinMarketCap
Celsius token holders tried to get the currency back to the highs to help the company in trouble, but it has been a huge loss.
For instance, on July 4, CEL’s community’s activity produced double gains.
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The Community of Woes
The cryptocurrency lender released a press release Wednesday morning revealing it had filed a Chapter 11 petition with the Southern District of New York bankruptcy judge. CEO Alex Mashinsky of the company stated in the statement that the filing was “the right choice” for the business.
Celsius was forced to limit customer withdrawals because of the market’s severe liquidity conditions. On July 13, the company filed for bankruptcy, despite having previously informed users it wanted to resume normal operations.
According to the CEO:
“I am confident that when we look back at the history of Celsius, we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company,”
The press release stated that Celsius had $167 Million in cash reserves, and plans to continue its operations.
Celsius customers expressed their views in response the bankruptcy filing. A list of numbers for suicide hotlines is one of the most popular subreddits posts. Hours after Celsius released its message, a user opened up about their problems in a another thread titled “I am suicidal.”
Trades in CEL/USD at $0.7 Source: TradingView
Numerous reactions to Celsius’ Twitter post from customers allege they have lost access to their life savings as a result of the company’s suspension of withdrawals. “I’m a sole parent. My life’s course will shift as a result. One person tweeted, “I feel nauseous. “Please let me borrow a rope from someone. Another person added, “Celtic just filed bankruptcy for me as well. Another person described how giving the business their money caused them to “lose pretty much everything.”
Celsius is also facing legal problems due to a suit brought by a former employee alleging that the company was a Ponzi scheme, and that it did not have adequate protections for client investment.
Voyager, another cryptocurrency lender filed for Chapter 11 bankruptcy protection following large losses. Celsius became the third processor of cryptocurrency to file this petition in less than a month. Three Arrows Capital filed for bankruptcy protection in the midst of volatile market conditions.
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Shutterstock image, Chart from TradingView.com/CoinMarketCap