• Akin Gump Strauss Hauer & Feld, a top US law firm, has reportedly been hired by Celsius to help navigate its ongoing crisis
  • Celsius paused user withdrawals and transfers, citing “extreme market conditions”

Cryptocurrency lender Celsius has hired a top US law firm to help navigate its financial headaches following a decision to freeze users’ accounts.

Due to its ongoing liquidity crunch, Celsius has tapped Washington, DC-based unit Akin Gump Strauss Hauer & Feld to assist in seeking out potential financing options from investors, the Wall Street Journal reported Tuesday.

Financial restructuring of Celsius could also be in the cards, according to the report that cited people familiar with the matter. Akin is an international law firm and one of the largest lobbying firms in the US by total revenue.

Celsius, which as of May boasted $11.8 billion in digital assets under management, made the decision Sunday to pause withdrawals, swaps and transfers between user accounts, citing “extreme market conditions.”

Early rumors of its financial trouble, alongside tepid crypto markets, had triggered the lender’s native token CEL to collapse 90% since April, from $3.15 to $0.40 when accounts were locked.

Celsius earns revenue by rehypothecating customers’ deposited funds. As demand for redemptions increased during the market downturn and exceeded Celsius’ liquid reserves on hand, the lender was forced to unwind its positions. As such, Celsius has faced a liquidity crisis as it fails to meet customer demand.

The Hoboken-headquartered company has said it decided to pause withdrawals to “stabilize liquidity and operations” — a move that has effectively shaken confidence in lenders among institutional and retail investors alike.

Prior to the lender’s decision to freeze accounts, it promised users annual percentage yields of up to 18.6% on crypto deposits, according to its website.

Blockworks attempted to contact Celsius and Akin but did not receive a reply by press time.

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  • Blockworks
    Senior Reporter, Asia News Desk
    Sebastian Sinclair is a senior news reporter for Blockworks operating in South East Asia. He has experience covering the crypto market as well as certain developments affecting the industry including regulation, business and M&As. He currently holds no cryptocurrencies. Contact Sebastian via email at [email protected]