Citigroup is helping Celsius evaluate its options after halting withdrawals to its clients.
On Monday, June 13, Celsius Network halted fund withdrawals to its customers, which set off alarm bells throughout the community, in the face of a possible lack of liquidity. The origin of this problem could be find yourself in the fall of Anchor Protocol and in the unlinking from stETH of the price of Ethereum.
In light of the potential legal issues Celsius Network could face, the company began to seek advice and it seems that he has found it in Citigroup.
The company will study the case in depth and offer advisory services to Celsius Network in the event of any potential lawsuits from clients or problems with the authorities, who are still monitoring developments. Under no circumstances will Citigroup put money on the balance sheet from the loan company.
The investment bank's sole task will be to offer advice and assistance on "possible financing options." At the same time, the entity is also advising Celsius on How to deal with offers like the one you received from Nexo.
Shortly after the news of the blocking of users became known, Nexus, another decentralized lending platform, made a purchase offer on Celsius Network's debt and collateral, which would essentially buy the company.
This would not be the first time Celsius and Citigroup have worked together. In the past, Citigroup advised the lending platform on the development of business plans and also on the Public Private Offering (IPO) of its mining subsidiary, Celsius Mining.
Last month, Celsius Mining confidentially filed a Draft Registration Statement on Form S-1 with the Securities and Exchange Commission (SEC). The registration statement is expected to become effective once the SEC completes its review process, subject to market conditions.
Authorities and the Celsius problem
Gary Gensler, chairman of the US SEC, has said that is aware of Celsius Network's problems and that the agency is closely monitoring the entire matter.
“Many of the cryptocurrency lending platforms actually They own your assets in a joint omnibus account“Then you see things like this weekend and Monday, where there’s a crypto exchange, a crypto lending platform, that said, ‘You can’t withdraw. Now, you can’t.’”
The SEC has typically been against decentralized cryptocurrency lending products. In the past, the SEC has slowed Coinbase's efforts to launch its lending service, Lend.
Other companies such as BlockFi and Nexo have been fined up to $100 million by the SEC and other regulatory agencies for non-compliance with the Securities Act.
Celsius Network CEO speaks for the first time
Yesterday, June 15, Alex Mashinsky, CEO of Twitter, spoke for the first time since the blocking of client assets. He did so through his Twitter account, with a post in which he assured that the team is working tirelessly, that they are aware of the fears of the community and ends by asking for patience.
However, the CEO has not answered any of the users' questions and continues to remain silent in response to questions from the community about the security of their funds or how they are working to resolve the issue.
Cover image: FuFu Wolf on Flickr.
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