Reportedly Crypto lending platform Celsius is close to falling into the bankruptcy phase.
Celsius is a crypto lending platform, which is known to provide services more likely to banks. The majority of the crypto holders usually hold their crypto assets on crypto lending platforms to earn extra yield. At present Nexo and Block are other examples of crypto lending firms.
On 24 June, WSJ reported that Celsius is facing a potential bankruptcy situation. The report noted that Celsius Network LLC hired restructuring consultants from Alvarez & Marsal (an Advisory firm) to advise on a possible bankruptcy filing, people who are close to this matter revealed as this crypto lending platform contends with the recent collapse in digital currencies.
If it will happen then surely it will create huge panic among those crypto Investors, which are using such crypto lending platforms to give & take loans at attractive interest rates easily without any documents, on behalf of collateral holding assets.
Problem with Celsius
Around 13 days ago, Celsius suspended its majority of the services like crypto withdrawal and trade of crypto assets because of insufficient liquidity at the platform.
On 15 June, Celsius CEO Alex Mashinsky talked about this issue and said that the team is working at its best to resolve the issue.
In May 2022, the whole crypto industry saw how the top 10 ranked crypto project Terra faced downfall and collapsed to around 0 value. However, later Terra project team relaunched its token in a new version but failed to grab that level of trust where it was standing before May.
Probably Terra collapse incident is working as catalyst to initiate panic and continuously forcing other crypto projects to remain aware from any kind of small mistake to avoid any big collapse like Terra.