In what seems a bit odd move, the Celsius network is suing over a thousand customers who withdrew their funds within ninety days of bankruptcy. The move, which has shocked the market, comes at a time when the network is trying to regain itself after exiting bankruptcy.
It was previously revealed that significant withdrawals between the April 14, 2022, to July 13, 2022, preference period severely weakened Celsius Network’s financial condition, which ultimately caused the company to declare bankruptcy soon after.
Celsius Network Bankruptcy
Celsius’ demise is thought to have been influenced by accusations of fraud and market manipulation made against former CEO Alex Mashinsky and other Celsius officials.
In July 2022, Celsius became one of numerous cryptocurrency lenders to apply for Chapter 11 protection right after the industry’s explosive growth during the COVID-19 pandemic. After the SEC rejected that idea, Celsius lowered its more ambitious goals of starting new business lines and earning fees from confirming cryptocurrency transactions. The change also meant that Celsius would no longer work with some of the outside bidders who were chosen to oversee the new business, placing US Bitcoin Corp, a mining company, in complete control of the new, creditor-owned mining enterprise.
Celsius had more than 1.7 million subscribers and more than $20 billion in assets under control at its height. But despite its early success, Celsius Network reportedly made several serious mistakes and faced other difficulties that ultimately contributed to its demise.
The incapacity or unwillingness of Celsius Network to protect its liquidity—as well as the liquidity of its users—from the erratic nature of the cryptocurrency market was probably one of the main causes of its problems.
Will CEL Fall Further?
The move to sue its customers might come across as a bit odd for many market participants, further hurting the reputation of the ecosystem. Therefore, today’s move can give CEL a further downward fall in the near term. However, keeping this aside, the presence of bullish cues can help the coin recover from the losses it has incurred so far.
Most technical indicators indicate that the current mood is bearish for the coin, and the Fear & Greed Index is currently at 29 (Fear). Over the previous 30 days, Celsius Network reported 11/30 (37%) green days with 21.98% price volatility. Analyst data indicates that there is an overall bearish feeling for the Celsius Network price prediction, with 7 technical analysis indicators indicating bullish signs and 25 indicating bearish signals.
