Lawyers hired by crypto lending platform Celsius are advising the company to declare bankruptcy. However, executives in Celsius would prefer to avoid a long-winded Chapter 11 process, and Celsius investors are needed to show their support for this.
Celsius is teetering on the brink, and it may well be that the Wall Street lawyers, hired for their advice by the company, will be able to talk the company into filing for Chapter 11 bankruptcy proceedings.
However, according to an article on Monday by The Block, executives of Celsius are resisting the advice of the lawyers it hired, and their preferred option is to buy more time in order to attempt to resolve the liquidity issues that forced their hand in the first place.
If the company is able to do this with some success, then far more of the investor wealth that is stuck on the platform can be slowly released back to them, leading to a much better outcome for investors. Crypto Daily reported on just such a recovery plan put forward by Simon Dixon and Bank to the Future.
According to Dixon, it’s all about getting as much value back to investors as possible. He recently tweeted the following, replying to The Block article:
On the subject of investors playing their part, The Block reported that “people with knowledge of the situation” are urging investors to show their support for avoiding the bankruptcy option by selecting “HODL mode” from within the Celsius app.
Celsius as a company is legally bound not to recommend or suggest anything to its investors, so its hands are tied to this end. However, if many investors suddenly select the HODL mode function in their Celsius app, then it would send a message to those concerned with trying to shut the company down, that this is not the will of the investors and would display their strength of feeling on the matter.
If the bankruptcy does go ahead, then Celsius assets will be sold into the market to fetch whatever they can get, and its investors will have to join the queue of creditors and probably have an extremely long wait before getting anything back from their investments.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
