Celsius, a crypto lending platform, has filed for Chapter 11 bankruptcy. It notified the individual U.S. regulators on Wednesday, Jul 13.
CNBC reported the news and referred to an anonymous source. The source requested anonymity because it was private.
According to the source, Celsius intends to file the paperwork “immediately”.
This news comes days after the lending platform rehired Kirkland & Ellis LLP as its law firm. The same firm that helped Voyager Digital file for bankruptcy in the Southern District Court of New York last Wednesday.
It comes after the announcement that Maker, Compound and Aave had paid all their DeFi debts to Maker, Compound and Aave. This lowered the platform’s debt from $820million to zero in just a few weeks.
Vermont’s Department of Financial Regulation (DFR), issued a warning Tuesday against the troubled crypto-lending firm. It reminded consumers that it is not licensed to provide its services in Vermont.
DFR stated that it believes the company is “deeply insolvent” without having “assets or liquidity” to meet its obligations towards customers. They also accused them of mismanaging customer funds, directing them towards risky investments.
Vermont is now the sixth US state to investigate Celsius’s crypto interest rates accounts. This joins the ranks of Alabama, Kentucky and New Jersey as well as Washington.
Rumours about Celsius’s insolvency started to circulate last month, after the crypto lender had to stop withdrawals because of “extreme market circumstances” on June 13.