Withdrawals in Celsius suspended indefinitely??
Cryptocurrency lending platform Celsius Monday told its social media accounts that it will pause Twitter and Reddit spaces to focus on more important matters such as debt restructuring, as withdrawals remain pending.
Celsius told her in a post that she is in an open dialogue with regulators and officials about when withdrawals can resume for users, and also said that the process may take time.
Celsius' comments indicate that it has been a week since it suspended withdrawals, swaps and transfers, due to a severe liquidity crunch.
The focus now turns to how the lender might be able to overcome its liquidity issues and potentially return clients' money.
Withdrawals in Celsius suspended indefinitely?
Based on Celsius' recent announcement, it appears that withdrawals from the platform are likely to remain on hold indefinitely.
Reports indicate that the company has hired lawyers to restructure, and it is possible that it has appointed “Citigroup” as a financial advisor for the restructuring.
Restructuring is usually the first step a company takes to find a way to pay off its debts without becoming insolvent.
It's not clear where Celsius' clients stand in the process, given that the company has taken out several highly leveraged loans.
While these loans were manageable when market conditions were favourable, the recent crash in cryptocurrency prices has caused the liquidation of many Celsius positions.
The drop in the price of Lido Staked Ethereum (stETH) was the latest and most severe blow to Celsius after the Terra crash also affected it.