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Celsius Reportedly Hiring ‘Restructuring Lawyers’ as Bankruptcy Speculation Mounts, CEL Pumps & Dumps

Tim Alper
Last updated: | 3 min read
Source: Adobe/Casimiro


A torrid week for the users and operators of the crypto lender Celsius Network (CEL) is continuing – with restructuring lawyers reportedly called in to help enact emergency measures. Meanwhile, CEL is on a roller coaster today.

The news, reported by the Wall Street Journal, comes after the lender faced mass liquidations, talk of insolvency, and threats of legal action. The firm on Monday suspended swaps, withdrawals, and transfers between accounts as markets shook, risking the fury of investors.

The WSJ quoted “people familiar with the matter” as stating that Celsius had “hired restructuring attorneys” from the law firm Akin Gump Strauss Hauer & Feld “to advise on possible solutions” for its “mounting financial problems.” 

The media outlet suggested that restructuring is still a worst-case scenario for Celsius, which is “first looking for possible financing options from investors.” However, it appears to want a Plan B, as it is “exploring other strategic alternatives, including a financial restructuring,” according to “one of the people familiar with the matter.”

Both the legal firm and Celsius executives declined the WSJ’s requests for comment on the matter.

Social media-based observers have claimed that Celsius could file for bankruptcy. Restructuring lawyers’ work often centers on bankruptcy procedures, but can also deal with a range of other financial matters, including new investments and debt rescheduling.

Earlier this week, Celsius said that it was “acting in the interest of our community,” which was its “top priority.”

Amid the confusion, a bogus token claiming to be a Celsius network reboot has also emerged, while multiple reports have claimed the firm made a number of large crypto movements before or around the time of the withdrawal suspension announcement.

On Reddit, one r/CelsiusNetwork community member lamented the fact that possible legal action could spell long-term pain for investors, opining:

“This could take years to settle now.”

Meanwhile, Adam Levitin, the Anne Fleming Research Professor and a Professor of Law at the Georgetown University Law Center, had some bleak predictions for what might happen if Celsius did file for bankruptcy, writing “all of Celsius’ foreign customers as well as any domestic customers who chose to use the Earn product” had effectively “made loans to Celsius.”

He wrote:

“That means they are unsecured creditors of Celsius. And they’re going to get shafted. Unsecured creditors will recover a pro rated share of whatever assets are left after all secured creditors have been paid and all of the administrative costs of the bankruptcy have been paid (lawyers, financial advisors). It’s not a happy place to be.”

He added that the “exercise now is just in loss mitigation and preparing for the storm of litigation that is coming.”

And the crypto-specializing lawyer Grant Gulovsen claimed that while bankruptcy filings might be “handy for Celsius’ directors and officers,” this would not be the case for the “counterparties who would probably prefer that the terms of their various agreements with Celsius remain out of public view.”

The CEL price remains exceptionally volatile. At 7:27 UTC, the token, now ranked 138nd by market capitalization, traded for USD 0.52 after it crashed from USD 1.42, briefly reached earlier today. The price is still up nearly 66% in the past 24 hours, but down 23% in the past week and 48% in a month, however – amid a wider crypto crash that has engulfed most major cryptoassets.

CEL price chart:



Learn more: 
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