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Celsius token loses 85% of its value as investors lose life savings

Celsius

TL;DR Breakdown

  • CEL a cryptocurrency lending firm that declared bankruptcy less than two weeks after halting client withdrawals, continues to suffer losses
  • Following the suspension of withdrawals and the subsequent bankruptcy filing, investors have begun to discuss their experiences as CEL’ problems worsen

Celsius inventors, a cryptocurrency lending firm that declared bankruptcy less than two weeks after halting client withdrawals continue to suffer losses.

Following the suspension of withdrawals and the subsequent bankruptcy filing, investors have begun to discuss their experiences as Celsius’ problems worsen. Some individuals have lost entire life savings invested in Celsius, for example.

The future of the impacted investors is further clouded by uncertainty about when normal operations will resume. Although Celsius has stated that withdrawals should be possible, recent events have dampened investors’ expectations.

CEL’s native token has seen significant capital outflows amid the company’s difficulties. Every year, CEL’s market cap has dropped by 85.84 percent in 2022, from $1.06 billion on January 1 to $0.15 billion on July 14, according to CoinMarketCap data.

Despite the holders attempting to have the crypto recover its highs to rescue the failing firm, the token has suffered huge losses. On July 4, for example, CEL’S community activity resulted in double profits.

Celsius company suffers losses

The firm began suffering severe losses early last month after attempting to freeze client withdrawals due to very adverse market circumstances. Although the firm had claimed it was working to resume normal operations, the July 13 bankruptcy filing has emerged as a last resort.

In a press release, the firm stated that it is applying for Chapter 11 bankruptcy protection while assuring investors that it is working to restore the corporation.

“This is the correct choice for our community and company. We have a competent and seasoned team to guide Celsius through this stage. I am certain that looking back at the history of Celsius, we will see this as a turning point, where acting with resolve and confidence served the public and strengthened the company’s future,” said Celsius

Will Celsius unfreeze the user’s fund?

They have not considered the option of unfreezing user funds since users have incurred losses, although several creditors have expressed an interest in doing so.

Despite users’ money remaining trapped, Finbold observed on July 7 that the company had wholly repaid its Bitcoin loan. It appeared to give investors fresh optimism.

The firm’s troubles have been compounded by a lawsuit filed by the company’s former employee, who claimed it was a Ponzi scheme that failed to provide adequate protection for client money.

Conversely, Celsius became the third crypto blender to seek bankruptcy in a month, following another crypto lender Voyager, which filed for Chapter 11 bankruptcy protection after significant losses. Three Arrows Capital has also sought bankruptcy protection to weather the stormy market conditions.

John Lincoln

John Lincoln

Lincoln contributes blockchain and crypto perspectives that meet the industry's selective information needs in a timely, undiluted fashion. His greatest wish is to share transformational technology through an engaging and easy-to-read style, making complex topics accessible to all.

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