Celsius Initiates Bankruptcy Proceedings to ‘Stabilize’ its Business

Celsius has initiated a financial restructuring to “stabilize” its business and has filed for reorganization under Chapter 11 of the US Bankruptcy Code

article-image

blockworks exclusive art by axel rangel

share

key takeaways

  • The lender recently replaced its former lawyers to those at Kirkland & Ellis LLP, the same lawyers handling Voyager’s bankruptcy filings
  • Celsius is said to have resisted calls from its previous lawyers to file for bankruptcy

Embattled crypto lender Celsius has filed for bankruptcy following notification to individual US regulators, heeding earlier advice from its previous lawyers to do so.

To implement the restructuring, Celsius said late Wednesday it and particular subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court for the Southern District of New York, according to a company blog post.

“Celsius initiated a financial restructuring to stabilize the business and maximize value for all stakeholders, the lender said in its post. “Acting in the best interest of our stakeholders, including our entire customer community, is our top priority.”

CNBC first reported the news citing one person familiar with the matter.

The lender said it intends to “put forward a plan” to restore activity across its platform. Celsius halted withdrawals last month citing “extreme market conditions” as a reason for doing so. The majority of account activity will be paused until further notice, Celsius said.

“Celsius is not requesting authority to allow customer withdrawals at this time,” it said. “Existing loans originated by Celsius affiliates will continue to be serviced while new loans are not expected to be issued “at this time.”

It’s the latest development for the lender which, at its height, had managed around $8 billion in crypto loans with around $11.8 billion in assets for around 1.7 million users as of May.

Celsius is said to have resisted advice from its own lawyers to file for bankruptcy, claiming user support would help it avoid the process altogether.

The New Jersey-based lender replaced its former lawyers at Akin Gump Strauss Hauer & Feld LLP with new ones from Kirkland & Ellis LLP earlier this week. Voyager, another troubled lender, is also using the same law firm.

A former crypto money manager and ex employee of Celsius has also sued the lender over allegations the firm misappropriated user funds to cover its shortfalls in its lending business. That manager is said to have cost Celsius $61.2 million in liquidations, according to data from Arkham Intelligence.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Featured.png

Research

Helium stands at a pivotal moment in its evolution as a decentralized wireless network, balancing rapid growth, economic restructuring, and global expansion. With accelerated growth in domestic DAUs and Hotspots supporting its network, Helium is leveraging strategic partnerships and innovative proposals to scale internationally. The recent implementation of HIP 138, “Return to HNT,” has unified its token economy under HNT, simplifying participation and strengthening liquidity, while HIP 139’s phase-out of CBRS refocuses efforts on scalable Wi-Fi offload. Meanwhile, governance shifts under HIP 141 raise questions about centralization as Nova Labs consolidates control over the roadmap.

article-image

The asset surged over the past seven days to reach its highest-ever weekly close on the SOL/ETH pair

article-image

Industry watchers note that SOL ETFs have attracted a fraction of the demand for bitcoin and ether ETFs

article-image

Tariff swings impact stock market and company outlooks, with Apple and NVidia likely to be affected by China tariffs

article-image

The team says an attacker minted unclaimed tokens from ZKsync’s 2024 airdrop

article-image

The MIT research-based protocol is live in private testnet — laying the foundation for decentralized RAM

article-image

The Balkan micronation went from Bitcoin economy to blockchain buzzwords in 10 years