Struggling cryptocurrency lender Celsius Network has hired restructuring consultants as it prepares for possible bankruptcy.
That’s according to a Friday, June 24 Wall Street Journal report, citing people familiar with the matter, who say Celsius has hired consultants from Alvarez & Marsal.
Read more: Crypto Nosedives after Celsius Collapse
Earlier this month, Celsius contacted law firm Akin Gump Strauss Hauer & Feld LLP for advice on possible restructuring plans, the Journal noted.
Celsius operates like a bank, accepting crypto deposits from retail customers and investing them in what is essentially the wholesale crypto market. It had offered annual returns as high as 18.6%, but suspended trading in June as bitcoin began to fall.
Celsius, which reportedly had 1.7 million customers at the start of the month, said “extreme market conditions” caused it to halt all withdrawals on the platform. The company’s eponymous coin lost more than 50% of its value in 24 hours.
Related: Another Firm Cuts Withdrawals, Highlighting the Dangers of Crypto Lending
The news comes a day after a report that another crypto lending platform, Voyager Digital, announced it was reducing its daily withdrawal limit to $10,000 from $25,000.
Voyager, like Celsius, had struggled since revealing exposure to potentially insolvent crypto hedge fund Three Arrows Capital, which suffered huge losses when stablecoin terraUSD and its partner cryptocurrency Luna plummeted. $48 billion last month.
See also: Crypto Lender Celsius under investigation by multiple US state regulators
Last week, securities regulators in Texas, Kentucky, Washington, New Jersey and Alabama said they were reviewing the company’s decision to suspend client redemptions.
Joseph Rotunda, director of enforcement at the Texas State Securities Board, said he was concerned “that clients – including many retail investors – may need immediate access to their assets without being able to to withdraw from their accounts”.
“The inability to access their investment can lead to significant financial consequences,” Rotunda said.