[This article was taken from NJTW News, an NJTechWeekly.com newsletter. Sign up for it here.]
Celsius Network (Hoboken), once a high-flying crypto lender, filed for bankruptcy last week.
Celsius estimated its assets and liabilities as between $1 billion to $10 billion, with more than 100,000 creditors, Reuters reported.
In its legal filing here, Celsius said that the company’s platform “grew faster than the Company was prepared to deploy.”
As a result, Celsius made what, in hindsight, proved to be poor asset deployment decisions.
Celsius was also affected by “unanticipated global events” that put a strain on the company’s activities.
“Among other factors, the lingering effects of the COVID-19 pandemic, coupled with rampant inflation and the adverse effects of the war in the Ukraine on the world economy, contributed to a massive sell-off in traditional assets in 2022.”
The filing also cited extreme volatility in the crypto market in 2022, which it called a “crypto winter.”
In the filing documents, Celsius says that it wants to mine more bitcoin to repay its customers and that it may sell off assets to do so.
According to another Reuters report, the company received approval from U.S. Bankruptcy Judge Martin Glenn to spend $3.7 million in construction costs at a new bitcoin mining facility and $1.5 million on customs and duties on imported bitcoin mining rigs.