Cryptocurrency lending company Celsius Network, that recently laid off 150 employees, has now filed for bankruptcy in the US amid extreme market conditions.
The platform said that it initiated voluntary Chapter 11 bankruptcy proceedings to provide it with the opportunity to stabilise its business and consummate a comprehensive restructuring transaction that maximises value for all stakeholders.
Celsius said late on Wednesday that it has $167 million in cash on hand, which will provide ample liquidity to support certain operations during the restructuring process.
The platform, which last month paused all withdrawals, was last valued at $3.25 billion.
"Without a pause, the acceleration of withdrawals would have allowed certain customers -- those who were first to act -- to be paid in full while leaving others behind to wait for Celsius to harvest value from illiquid or longer-term asset deployment activities before they receive a recovery," said the company.
Alex Mashinsky, Co-Founder and CEO, Celsius, said that this is the right decision for its community and company.
"I am confident that when we look back at the history of Celsius, we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company," he said.
Meanwhile, the founders of another bankrupt cryptocurrency hedge fund Three Arrows Capital (3AC) have vanished and the officials charged with liquidating the company were looking for their whereabouts.
The mega fund, founded by Credit Suisse traders Zhu Su and Kyle Davies, once managed an estimated $10 billion in assets.
The Singapore-based 3AC filed for bankruptcy in the US earlier this month to protect its assets from creditors.
The bankruptcy came as popular crypto tokens such as Bitcoin and Ethereum nosedived by nearly 70 per cent from their record highs amid the economic meltdown.
3AC defaulted on a more than $650 million loan provided by crypto broker Voyager Digital, which has also filed for bankruptcy.