Celsius Network, the embattled crypto lender, filed for Chapter 11 bankruptcy on Wednesday, July 13, after making numerous attempts to pay back its loans. After hearing the news, Celsius Networks’ native cryptocurrency, CEL, plummeted from 95 cents to 45 cents.

In terms of value, the CEL token stands at roughly 55 cents. Celsius just revealed that it had $167 million in cash on hand. According to Celsius, this will offer enough liquidity to keep things running smoothly while the company undergoes its restructure.

Negotiations with creditors are a requirement in Chapter 11 bankruptcy, and this is how it works. The advantage of this chapter over Chapter 7 is that the debtor does not have to sell off any of its assets.

Celsius has announced that it will go through a significant reorganization in order to optimize value for all of its constituents. New York’s Southern District of the United States Bankruptcy Court was the location where the corporation filed for bankruptcy. Alex Mashinsky, Celsius’ co-founder and CEO, addressed the issue:

My colleagues and I believe that this is the appropriate move for both our company and our community. This process will be handled by a well-trained and experienced personnel. When we look back on this time in Celsius’s history, I’m convinced that we’ll remember it as a pivotal period in which we showed commitment and faith in the community while also strengthening Celsius’s future.”

The number of cryptocurrency-related bankruptcies has increased significantly in the recent month. With the bankruptcy of Celsius, hedge fund Three Arrows Capital (3AC) and cryptocurrency lender Voyager Digital join the list of notable crypto companies that have declared bankruptcy.

While crypto withdrawals have risen sharply in the wake of the recent market downturn, the crypto ecosystem is now suffering from a severe liquidity shortage. Thus, lenders struggle to pay their consumers when they withdraw money.

Earlier this month, in June, Celsius ceased all withdrawals. As a result, Aave, Compound, and Maker platforms have received almost $800 million in loan repayments as of this writing.

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