Celsius Network, among the largest crypto lenders, has paused user accounts, citing extreme market conditions
Crypto lender Celsius Network LLC has hired restructuring attorneys from law firm Akin Gump Strauss Hauer & Feld LLP to advise on possible solutions for its mounting financial problems, according to people familiar with the matter.
Last week Celsius told users that it was pausing all withdrawals, swaps and transfers between accounts because of extreme market volatility.
Celsius is first looking for possible financing options from investors but is also exploring other strategic alternatives, including a financial restructuring, one of the people familiar with the matter said.
Celsius lends out customer deposits to other users to earn a return. The company managed $11.8 billion in assets as of May 17, according to its website. It offers users annual percentage yields of up to 18.63% on cryptocurrency deposits. The company said it has 1.7 million users.
A spokeswoman for Akin Gump had no immediate comment. Celsius executives didn’t immediately respond to requests for comment.
Lawmakers have recently been turning their attention to what could happen if a cryptocurrency platform fails. A bipartisan duo of senators last week proposed a law that would aim to protect investors in the event that a crypto exchange files for bankruptcy by ensuring that their digital assets would be held separate.