Zero Degrees

The atmosphere at Celsius has been chilly for some time. Temperatures started to drop in April, then the mercury plunged all the way to the arctic tundra of bankruptcy. How did something become nothing?

• The first signs that trouble was brewing came in April. Celsius announced they were limiting yield services in the U.S. to accredited investors only.
• Then in May, the LUNA collapse and subsequent domino effect led to a bank-run of withdrawals. Celsius took the extreme measure on June 13th of freezing all withdrawals, swaps, and transfers.
• In July they laid off nearly a quarter of their workforce and managed to pay off their Aave loan. Alas, on July 13th they filed for bankruptcy protection in New York.
• One investment firm founder believes retail customers may get partial funds back but that the “consumer business is dead“.
• Since then there have been several bankruptcy hearings in court. The discussion revolves around who gets first priority for refunding what’s left.
• One of the queries is whether those who were only holding funds in Celsius should be refunded before those who were looking to earn a yield.

Yesterday, reports surfaced from a court document that co-founder Daniel Leon had claimed his equity was “worthless“. This could be his attempt to write it off as a tax deduction.