After crypto lending platform Celsius halted operations on June 12 at 10:10 p.m. ET, two days later The Wall Street Journal (WSJ) quoted “people familiar with the matter” as saying that Celsius was hiring restructuring lawyers. At the time, the WSJ said Celsius was looking to hire bankruptcy and restructuring law firm Akin Gump Strauss Hauer & Feld LLP. However, a new WSJ report claims Celsius is now working with restructuring consultancy Alvarez & Marsal.
Sources say Celsius may collaborate with restructuring consultancy
The current financial situation of crypto credit company Celsius is still unknown and as of June 12, people still suspect that the company is insolvent. Bitcoin.com News reported on the rumors and speculation surrounding the company as of today and on June 13, crypto lending company Nexo Free to buy Celsius-based assets.
The reason people suspect Celsius is in financial trouble is because of the company’s June 12 tweet. “Due to extreme market conditions, we are announcing today that Celsius is suspending all withdrawals, exchanges and transfers between accounts”, Celsius revealed. There has also been speculation about Celsius having 17,919 WBTC mined in the Maker Protocol which faced liquidation.
On June 14, a WSJ report indicated that Celsius was seeking to hire restructuring law firm Akin Gump Strauss Hauer & Feld LLP. “People familiar with the matter” explained that Celsius was first trying to get help from investors. At the time, Akin Gump did not comment on the matter when asked if the company was involved in Celsius. Now, another WSJ report says Celsius may be collaborating with restructuring consultancy Alvarez & Marsal.
People familiar with the matter say Goldman Sachs has an eye on Celsius network assets
Additionally, Tracy Wang of Coindesk reported that “Goldman Sachs is seeking to raise $2 billion from investors to buy distressed assets from troubled crypto lender Celsius.” Wang said the information came from “two people familiar with the matter”. The report goes on to explain that the two sources said the proposed deal with Goldman Sachs “would allow investors to purchase Celsius’s assets at potentially significant discounts in the event of a bankruptcy filing.”
A Reuters report further clarified that the U.S. Securities and Exchange Commission (SEC) and state regulators were investigating Celsius over the account freeze. Other accounts said Akin Gump and financial giant Citigroup told Celsius they had recommended it file for bankruptcy. The report that discusses the alleged recommendation from Akin Gump and Citigroup says both companies declined to comment on the matter.
After Celsius suspended withdrawals, there hasn’t been much word from the company, except for a blog post that tells the Celsius Network community that “the company’s goal continues to stabilize our liquidity and operations.” Celsius added that the “process will take time” but the message did not detail what type of process it meant. In the comments section, Celsius gets a lot of criticism on the matter.
“Basically, you haven’t added anything to what you’ve already said. Which is, in and of itself, already very little,” one person wrote in response to the company’s statement. “The lack of transparency is very concerning,” another person said. “Choosing Celsius was the worst choice of my life,” an average user called “Crypto Cooper” wrote five days ago. CEL, the native token of the Celsius network, is down 80.9% in the past 12 months and 86.3% below the asset’s all-time high.
What do you think of the report that Goldman Sachs is looking to buy distressed assets from crypto lender Celsius? Let us know what you think about this topic in the comments section below.
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