Celcius Market Cap Crashes 86% On Year-To-Date Basis As Company File For Bankruptcy
July 14 2022 - 4:11PM
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Investors in the failing cryptocurrency lending startup Celsius are
still losing money weeks after the company filed for bankruptcy.
Customer withdrawals had been frozen. Celcius Market Cap Crash 86%
As the company’s problems worsen, investors have stepped out to
relate their experiences following the withdrawal freeze and the
ensuing bankruptcy application. One user who placed their entire
life money in Celsius lost everything. Uncertainty over when
business as usual will return further complicates the situation for
the affected investors. 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 YTD. Source: CoinMarketCap
Despite attempts by Celsius holders to push the cryptocurrency back
up to its highs in an effort to save the struggling company, the
token has suffered huge losses. For instance, on July 4, CEL’s
community’s activity produced double gains. Related reading
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Plummet Again? A Community Of Woes Early on Wednesday morning, the
cryptocurrency lender issued a press release revealing that it has
submitted a Chapter 11 petition to the Southern District of New
York bankruptcy court. CEO Alex Mashinsky of the company stated in
the statement that the filing was “the right choice” for the
business. After limiting customer withdrawals due to harsh market
conditions that affected liquidity, Celsius ran into difficulty
early last month. The company filed for bankruptcy on July 13 even
though it had previously told users that it was trying to return to
normal operations. The CEO noted: “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,” According to
the press statement, Celsius has $167 million in cash reserves and
intends to continue operations. Customers of Celsius have expressed
their opinions in response to the bankruptcy filing. One of the
most popular posts on a subreddit devoted to the firm includes a
list of suicide hotline numbers. Hours after Celsius released its
message, a user opened up about their problems in a another thread
titled “I am suicidal.” CEL/USD trades 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.” The troubles of Celsius have also been
made worse by a lawsuit brought by a former employee who claimed
the company was a Ponzi scheme and lacked adequate safeguards for
client investments. Notably, Voyager, another cryptocurrency
lender, filed for Chapter 11 bankruptcy protection after suffering
large losses, making Celsius the third cryptocurrency processor to
do so in a month. Amidst erratic market conditions, Three Arrows
Capital also applied for bankruptcy protection. Suggested Reading
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Upswing In Place? Featured image from Shutterstock, chart from
TradingView.com and CoinMarketCap
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