Celsius Hired New Law Company To Oversee Restructuring: Report

Celsius hired new law company to oversee the restructuring process and the new legal counsel comes from Kirkland & Ellis LLP so let’s read more today in our cryptocurrency news.

Less than a month after pausing withdrawals for customers, crypto lender Celsius hired a new law company to help with the restructuring process. According to people familiar with the matter, the reports show that Celsius hired lawyers from Kirkland & Ellis LLP which replaces the ones from Akin Gump Strauss Hauer & Feld LLP that were hired last month.

The New Jersey-based company seized up under the liquidity pressure and locked 1.7 million users out of their accounts which lead to the pause but Celsius offered customers high yield loans of up to 18% on the deposits and maintains the users will accrue more rewards in the future:

“We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets. We are working diligently to meet our obligations.”

Celsius is not the only crypto platform that is working with Kirkland and Ellis, Voyager Digital also filed for chapter 11 bankruptcy and also hired this company last week. Voyager’s customers sought to withdraw the funds from the company after the decision of Celsius to freeze accounts. Celsius has not filed for bankruptcy yet but the lender faces some burning questions over the solvency and pairing up with the law company could indicate a shift in the overall strategy.

As recently reported, One of the best parts of the DEFI space is the transparency and the recent events in the markets made that clear. Everyone on the market can see who is borrowing what and how much they are borrowing but also what is the rate of the liquidation. If you compare this to various deals Three Arrows Capital conducted, some of the partners were made without any collateral and based on the word of the 3ac crew. During the crypto market crash, it was interesting to see how the liquidation mechanisms in the DEIF space operated. There were no backdoor deals to save the positions and the rules like the loans were also fully transparent.