The Celsius Network (CEL-USD) and its journey through bankruptcy has been one of the most closely followed stories in the crypto world this year. It’s a tale that warns of the dangers of over-leveraging, like the 2008 financial crisis but tailored to the blockchain era. The story is also proving to be incredibly interesting, with the company refusing to part out what’s left and close down shop. Today, Celsius is taking another step toward a full recovery by filing to resume withdrawals. In response to the news, the largely floundering CEL crypto is continuing its recent turnaround with some big gains.
The crypto winter didn’t slowly sink into the market. Instead, it was a flash freeze. Nobody was ready, especially the fleet of crypto investment companies that saw bankruptcy just days after the market crash. These companies — including Celsius — had taken out massive loans from dozens, sometimes even hundreds of DeFi lenders. As prices plummeted, they missed margin calls en masse. They then each fell into hundreds of millions of dollars in debt.
Celsius became a controversial company just after the crash began, being one of the first platforms to halt users from withdrawing their funds. Saying that the measure was meant to protect customers, investors did not receive the move well at all. Many say it did more harm than good. Indeed, many investors had to watch their investments plunge in value rather than exit them entirely.
Ultimately, the Celsius Network staved off bankruptcy until July — and it did so only after paying off debts to some of its biggest lenders. The company is not going down quietly. Now, it looks like Celsius’ strategy is paying off as the company reaches a milestone today.
Celsius Network: Withdrawal Filing Boosts CEL Crypto
In August, the Celsius Network came out with a plan to help it navigate Chapter 11 bankruptcy. Basically, Celsius hopes to use its crypto mining subsidiary to pay off debts and turn back into a profitable company.
Controversial as this decision may be, Celsius recently won the approval of a presiding judge and is getting ready to ramp up operations. News today shows Celsius upping the ante even more by unlocking users’ funds. That is resulting in a big win for the struggling CEL crypto.
Thursday saw the third bankruptcy hearing for the Celsius Network. Much of the debate was spent on customer funds being frozen within the company’s platform. Clients and Celsius itself differ over who should get their funds back sooner than later. Specifically, Celsius asserts that only those who put their funds directly into custody, rather than staking, should qualify for immediate withdrawal privileges.
Regardless of who qualifies and on what grounds, it’s still huge that Celsius is beginning to unleash some of its $225 million in frozen user funds. In fact, the company made its first filing on the matter in court yesterday. It’s now looking to free up $50 million in funds to custodial users, a motion specifically targeting retail investors. The company only seeks to grant accounts with less than $7,575 in assets the ability to withdraw funds.
Investors are happy with this news; CEL crypto prices prove as much. When Celsius filed for bankruptcy, CEL traded at about 70 cents. In late August, the crypto began to mount a comeback before falling once again. Now, though, a roughly 30% gain in the last 24 hours is helping lever prices back up to the $1.50 mark. Soaring volume is aiding the pump, increasing more than 120% in the past 24 hours.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.