Embattled cryptocurrency lender Celsius Network has hired restructuring consultants as it prepares for a possible bankruptcy.
That’s according to a Friday (June 24) Wall Street Journal report, citing people close to the matter, who say Celsius had hired consults from the firm of Alvarez & Marsal.
Read more: Crypto Nosedives Following Celsius Collapse
Earlier this month, Celsius had contacted the law firm Akin Gump Strauss Hauer & Feld LLP for advice on possible restructuring plans, the Journal noted.
Celsius functions like a bank, accepting crypto deposits from retail customers and investing them in what is essentially the wholesale crypto market. It had offered annual returns as high as 18.6%, but paused trading in June as bitcoin began plummeting.
Celsius, which reportedly had 1.7 million customers as of earlier this month, said “extreme market conditions” led it to stop all withdrawals on the platform. The company’s eponymous coin lost more than 50% of its value in 24 hours.
Related: Another Firm Cuts Withdrawals, Highlighting Crypto Lending’s Dangers
The news comes one day after a report that another crypto lending platform, Voyager Digital, announced it was reducing its daily withdrawal limit to $10,000 from $25,000.
Voyager, like Celsius, had struggled since it revealed exposure to potentially insolvent crypto hedge fund Three Arrows Capital, which took suffered huge losses when the terraUSD stablecoin and its partner cryptocurrency, Luna, plummeted in a $48 billion run last month.
See also: Crypto Lender Celsius Under Investigation by Several US State Regulators
Last week, securities regulators in Texas, Kentucky, Washington, New Jersey and Alabama said they were looking into the company’s decision to pause customer redemptions.
Joseph Rotunda, enforcement director at the Texas State Securities Board, said he was concerned “that clients — including many retail investors — may need to immediately access their assets yet are unable to withdraw from their accounts.”
“The inability to access their investment may result in significant financial consequences,” Rotunda said.
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