Celsius Network Looks to Return Customer Funds, Reversing CEL Crypto Losses

A representation of the Celsius (CEL) cryptographic token.

Source: Satheesh Sankaran / Shutterstock.com

The Celsius network (CEL-USD) and his journey through bankruptcy was one of the most followed stories in the cryptocurrency world this year. It’s a story that warns of the dangers of over-leverage, like the 2008 financial crisis, but adapted to the blockchain era. The story is also proving incredibly interesting, with the company refusing to separate what’s left and close the shop. Today Celsius is taking another step towards a full recovery by submitting a request to resume withdrawals. In response to the news, the largely struggling CEL cryptocurrency is continuing its recent turnaround with some big gains.

The cryptocurrency winter hasn’t slowly sunk into the market. Instead, it was a flash freeze. No one was ready, especially the fleet of cryptocurrency investment firms that went bankrupt just days after the market crash. These companies, including Celsius, had obtained large loans from dozens, sometimes even hundreds, of DeFi lenders. When prices plummeted, they lost margin calls en masse. Then each of them went into debt for hundreds of millions of dollars.

Celsius became a controversial company soon after the crash began, being one of the first platforms to prevent users from withdrawing their funds. Saying the measure was intended to protect clients, investors did not welcome the move. Many say it has done more harm than good. Indeed, many investors have had to watch their investments drop in value rather than abandon them altogether.

Ultimately, Celsius Network avoided bankruptcy until July, and did so only after paying off debts to some of its major lenders. The company is not going down silently. Now, it appears that Celsius’s strategy is paying off as the company reaches a milestone today.

Celsius Network: Withdrawal Request Increases Crypto CEL

In August, the Celsius network unveiled a plan to help it overcome the Chapter 11 bankruptcy. Basically, Celsius hopes to use its cryptocurrency mining subsidiary to pay off debts and get back into a profitable company.

As controversial as this decision may be, Celsius recently got the approval of a council chairman and is preparing to step up operations. Today’s news shows that Celsius ups the ante even further by unlocking user funds. This results in a big win for the struggling CEL cryptocurrency.

The third bankruptcy hearing for the Celsius network was held on Thursday. Much of the debate has been spent on freezing client funds within the company’s platform. Customers and Celsius himself differ as to who should get their funds back sooner or later. Specifically, Celsius says that only those who put their funds directly into custody, rather than staking, should benefit from immediate withdrawal privileges.

Regardless of who will qualify and on what basis, it’s still huge that Celsius is starting to run wild some of its $ 225 million in frozen user funds. The company, in fact, yesterday filed the first instance in court. It is now looking to free up $ 50 million in custody user funds, a motion specifically aimed at retail investors. The company only tries to give accounts with less than $ 7,575 in assets the ability to withdraw funds.

Investors are happy with this news; The prices of CEL cryptocurrencies prove this. When Celsius filed for bankruptcy, CEL traded at around 70 cents. At the end of August, the crypto began to rise in comeback before falling again. Now, however, a roughly 30% increase in the past 24 hours is helping to push prices back to $ 1.50. The increase in volume is helping the pump, increasing by more than 120% in the last 24 hours.

As of publication date, Brenden Rearick did not hold (either directly or indirectly) any position in the securities referred to in this article. The views expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Brenden Rearick is a financial news writer for InvestorPlace’s Today’s Market team. He mainly deals with digital assets and tech stocks, with a focus on cryptocurrency regulation and DeFi.

Leave a Comment