The Celsius And Voyager Digital Connection: Same Layers Help Out The Firms
- Celsius has hired the Kirkland & Ellis LLP law firm to help in its restructuring process
- Kirkland & Ellis LLP was the general counsel for the bankruptcy proceedings of Voyager Digital
The bearish crypto market that was initiated in May has seen some of the biggest crypto firms tumble down to ashes in the past few weeks, including crypto lender Celsius Network and exchange platform Voyager Digital.
In order to “emerge” as a strong company, Celsius confirmed that it will undergo a restructuring process and hence, the US-headquartered crypto lending platform and certain of its subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York.
According to a previous report from the Wall Street Journal, Celsius has hired the Kirkland & Ellis LLP as restructuring lawyers to help the firm during these tough times. Interestingly, this is the same law firm that was hired by Voyager Digital as its general counsel for bankruptcy filing.
Voyager Digital filed for bankruptcy a few weeks after it issued a default notice to Three Arrows Capital, popularly known as 3AC, a Singapore-based cryptocurrency hedge fund whose founders are missing. 3AC had also filed for bankruptcy and liquidators aimed to secure the firm’s assets in Singapore. They have filed for the same in the High Court of the city-state.
3AC’s loan default, along with the current volatility of the overall crypto market was the reason why Voyager filed for bankruptcy.
While the same law firm continues to help Celsius and Voyager, the troubles for the former are far from over. The crypto lending firm allows people to earn high rates of interest but failed to hedge risk and as a result, suffered from liquidity issues when the market turned bearish.
A recent filing states that the CEO Alex Mashinsky has confirmed in the bankruptcy filing that the crypto lender owes around $4.7 billion to its users.
Former asset manager, KeyFi also sued Celsius for mismanagement of funds and the head of the firm, Jason Stone, claims that the crypto lender owes KeyFi money. Stone added that Celsius was defrauding his team during their business partnership. The crypto lender is yet to pay for the services rendered nor acknowledge its termination of the deal.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
