According to the terms of service of the loan platform, consumers are not guaranteed the restoration of their cash if Celsius files for bankruptcy.
Celsius has recruited restructuring advisors in anticipation of a possible bankruptcy filing, the Wall Street Journal reported on Friday, citing sources with knowledge of the situation.
The cryptocurrency lending company, which suspended withdrawals, swaps, and transfers earlier this month, has allegedly engaged three advisors from the consultancy firm Alvarez & Marsal.
In the event that the lending company declares bankruptcy, there is no assurance that consumers will be able to reclaim monies kept on the platform.
“You may not be able to reclaim or restore ownership of such Digital Assets if Celsius declares bankruptcy, enters liquidation or is otherwise unable to meet its obligations,” Celsius’s terms of service warn.
The Celsius team’s last public communication was a blog entry published on June 19, one week after the project’s suspension.
Since the founding of our organization, maintaining an open discussion with regulators and government authorities has been a top focus. We want to continue working with authorities and officials to find a resolution to this halt. The post made no mention of the possibility of insolvency or the condition of consumer money.
In response to unpredictable market circumstances, the lender first froze withdrawals, swaps, and transfers in an effort to “stabilize our liquidity and operations.” Until further notice, Celsius has also suspended its weekly question-and-answer sessions with the community. Celsius did not reply to a request for comment immediately.
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