Celsius’ CEL token shot up close to 200%, bringing the price briefly above $1. However, the price immediately stabilized near the $0.50 level, holding the rally close to 75% in the past 24 hours. It happened after DeFi cryptocurrency lender Celsius Network hired restructuring attorneys from law firm Akin Gump Strauss Hauer & Feld LLP.

In fact, Celsius plans to raise funds from investors, as well as look at other options, including restructuring to mitigate financial damage and improve operations.

Celsius hires restructuring lawyers amid mounting financial troubles

Celsius Network has hired restructuring attorneys from law firm Akin Gump Strauss Hauer & Feld LLP due to financial constraints, the Wall Street Journal reported on June 15.

On June 13, Celsius announced that all withdrawals, swaps and transfers between accounts were suspended due to extreme market volatility. Following the announcement, Celsius’s CEL token plunged nearly 70%, causing the crypto market to crash.

However, in the past 24 hours, the Celsius (CEL) token price has risen more than 200%, supported by a massive 250% trading volume, reaching a high of $1.17. The CEL token is currently trading at $0.5216, up nearly 75%. The decision to pause withdrawals and transfers brought some relief as the company tries to resolve its mounting financial problems. However, the large swings could be due to the liquidation of short sellers and signs of solvency.

Celsius managed $11.8 billion in assets on May 17, according to its website. It offers its 1.7 million users annual percentage returns of up to 18.63% on cryptocurrency deposits.

With restructuring as the first step to avoid bankruptcy, the company could also seek bankruptcy if restructuring plans fail. In addition, Celsius has already warned its customers that they may not be able to get their digital assets back in the event of bankruptcy.

How stETH Depeg caused the drop in Celsius

DeFi platform Celsius had locked up customers’ funds in stETH, a token representing ETH locked to the Ethereum 2.0 beacon necklace. ETH’s recent stETH depeg triggered a surge in redemptions, leading to a liquidity crisis. The depeg put heavy selling pressure on stETH, threatening Celsius’ positions. As a result, the company also started liquidating stETH tokens for ETH.

Varinder is a technical writer and editor, technology enthusiast and analytical thinker. Fascinated by Disruptive Technologies, he has shared his knowledge about Blockchain, Cryptocurrencies, Artificial Intelligence and the Internet of Things. He has been associated with the blockchain and cryptocurrency industry for a significant period of time and currently covers all the latest updates and developments in the crypto industry.

The content presented may contain the author’s personal opinion and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication is not responsible for your personal financial loss.

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