Celsius is hiring lawyers and planning a restructuring

After blocking the selections of its users, the Celsius protocol decided to start a complete restructuring of its activities. According to Wall Street Journal The protocol has already hired a law firm specializing in restructuring.

According to the daily, the contracting company is Akin Gump Strauss Hauer & Feld LLP. Citibank will also help resume activities. In addition, they noted that the company is seeking assistance from its investors other than financial restructuring. In other words, the restructuring plan is unlikely to mean only new investments.

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The Celsius case and the plan for restructuring

With the proposal to offer attractive yields, Celsius has grown to become one of the largest protocols in this market. In exchange for the insertion of cryptocurrencies, investors received returns that could reach up to 18.63 % per year. However, many expressed concern about the sustainability of the Celsius model.

In general, credit protocols thrive in healthy market times. But now that the time has fallen for prices, they tend to get into trouble. So with the fall of the crypto market this week, Celsius finally had to stop selecting users.

And in this sense, Celsius may have to reorganize his entire income system to look for a more sustainable model. The protocol has not yet given clear reasons for blocking selections.

"CelsiusNetwork works for our community 24 hours a day. Everything is in the solution, so there will be no posts on Twitter this week, "said the protocol team.

This has sparked speculation among Celsius' customers that the company may be insolvent. This hypothesis was reinforced when the company hired a law firm specializing in corporate restructuring.

In terms of market position, Celsius has added 6,000 Wrapped BTC (WBTC) to the Defi MakerDAO platform. The measures serve to ensure that the protocol does not have to meet its obligations and loses resources.

If the restructuring of Celsius does not work, the company may have to consider an acquisition bid by a competing Nexa, which sent a letter to Celsius offering to buy all the company 's assets and take over the protocol portfolio with more than 1.7 million customers.

Meanwhile, the Texas Securities Council also began investigating the Celsius case. US Securities and Exchange Commission (SEC) chairman Gary Gensler has warned investors to be wary of platforms that offer returns that are "too good to be true."

Several senators last week introduced a bill aimed at protecting investors in the event that a cryptocurrency company eventually goes bankrupt. According to the design, cryptocurrencies held by companies belong to customers. Therefore, companies will not be able to include them in their balance sheets as assets.

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All content in this article is for informational purposes only and does not in any way serve as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.