The crypto market has always been volatile, but the last several months have been disastrous for crypto investors and companies. Several well-known crypto companies have gone bankrupt. One of the most prominent crypto investment firms, Celsius, recently filed for chapter 11 bankruptcy. They were severely affected by the downturn in the crypto market. Many investors did not receive refunds for the money they invested with the company. Read on to learn more about Celsius filing for bankruptcy and what this means for their investors.
Celsius Files for Bankruptcy
Celsius filed for bankruptcy in July 2022, which was a surprise to many in the crypto industry. However, insiders and Celsius investors may not have been entirely surprised. The company froze withdrawals several weeks before it filed for bankruptcy. When a crypto company does this, this often means that the company is in serious trouble. Celsius is not the first company to freeze withdrawals and file for bankruptcy shortly after. Some investors were able to get their money out before all withdrawals were frozen. However, the majority of investors were not able to withdraw their money.
Massive Downturn in Crypto Market
The crypto market is notoriously volatile and has been through several major downturns in recent years. However, the massive downturn in the crypto market that started in Spring 2022 and continued into Summer 2022 was unexpected and unprecedented. Major cryptocurrencies like Bitcoin and Ethereum have lost 40 to 50% of their value since the beginning of the year. The severity of this downturn has led many to question whether crypto has a future. Unsurprisingly, Celsius is hardly the only crypto company to go bust during this period.
Investors Will Have to Wait for Refunds
Celsius has ensured investors that they will go to great lengths to refund their money. Most investment firms that have declared Chapter 11 bankruptcy do end up refunding most, if not all, of their investors’ money. However, this process could take months or even years. Also, there is a good chance that investors will not get all of their money back.
