The embattled crypto lending platform Celsius has kept withdrawals and transfers frozen since June 12 and told the Celsius Network community that the “process will take time.” Since then, Celsius users are wondering why they are still receiving weekly rewards, and reportedly the company’s management has been arguing with its lawyers over whether or not the business should file for Chapter 11 bankruptcy. However, most of the Celsius articles these days are quoting ‘people familiar with the matter,’ and ultimately these sources cannot be verified.
Celsius Customer Says It Is ‘Insulting’ That the Lending Company is Still Paying Weekly Rewards
16 days ago, the crypto lending platform Celsius told customers that it was pausing swaps, transfers, and withdrawals and did not refer to a time when the company would reinstate the services. Since then, it has been assumed that Celsius is suffering from a financial hardship and possible insolvency.
Last week it was reported by the Wall Street Journal (WSJ) that the company was seeking restructuring advice from the advisory firm Alvarez & Marsal. Another report that followed claimed that Goldman Sachs was allegedly looking to buy distressed assets from the firm “at potentially big discounts in the event of a bankruptcy filing.”
Furthermore, on June 27, Bnktothefuture CEO Simon Dixon wrote about still getting his weekly rewards from the company, despite the frozen withdrawals. “Email on one of my accounts,” Dixon wrote. “Can’t withdraw but Celsius Network [is] still paying out. I’m curious if you think the rewards should still be coming? Thoughts?” Dixon added.
Some members of the crypto community called the dispersal of weekly rewards offensive. “This is honestly insulting, Celsius Network is still paying weekly rewards while holding my crypto hostage,” an individual tweeted on Monday.
Meanwhile, some users asked if there were any onchain activities stemming from the Celsius Network or whether or not capital has been moved. “Is anyone still keeping up with Celsius Network’s onchain activities of their funds? If they still paying down their loan/moving capital etc…,” one person wrote on Twitter.
Another person mentioned it was likely a legal chess move by Celsius’s management. “They’re likely still “paying” rewards because if they stop, they violate their terms of service (contract) and then have no lawful reason to hold your funds in earn any longer,” the…
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