Global DeFi protocol, Chainge Finance, is planning to institute an application with the United States Bankruptcy Court Southern District of New York. This protocol made the revelation in a Twitter thread relayed via its official handle on Wednesday. As revealed, Chainge decided to apply a bid to obtain specific virtual assets from Celsius, a crypto lender currently ravaged by liquidity issues. Additionally, Chainge says it intends to pursue the application concerning the debt restructuring process of the crypto lender.
Chainge Finance further that it is keeping in contact with the financial advisors of Celsius. This, according to Chainge, is geared towards ensuring the initiation of an effective proposal with the creditors. As observed in the filing, the protocol intends to offer every customer of Celsius an additional 5% subsidy in tokens. This, as revealed, will be carried out concerning the amount to be compensated derived from Celsius’ assets. Nevertheless, Chainge revealed that such effort is subject to the completion of due diligence satisfactory to Chainge.
Additionally, the protocol affirms its commitment to implementing programs capable of protecting the interests of Celsius users, particularly those who suffered losses during this event. Also, the DeFi platform plans to harness decentralised technologies to prevent the recurrence of such crises.
Recall that Celsius announced a temporary suspension of withdrawals, deposits, and trading over liquidity issues in June. This development, as reported, manifested as one of the measures geared toward putting the lender in a better position to fulfil its withdrawal obligations.
According to Celsius, the decision to halt the processes will help solidify liquidity and operations on the network. However, it has not yet announced a date for the recommencement of withdrawals. In early July, the crypto lender also embarked on various restructuring processes, particularly by reshuffling its management board.
In the past week, past employees of the crypto lender, as reported by CNBC, cited poor risk management and alleged market manipulation as the architects of the Celsius crisis. According to a former director of financial crimes compliance with Celsius, Timothy Cradle, the firm’s approach to managing risk is poor, a development which plunged it into its current state.
Additionally, Cradle hinted that he previously served as a member of a three-person compliance team with the firm. He decided not to apply international finance laws to Celsius Network’s business because of resource limitations.
According to reports, the current value of Celsius native token, CEL, stands at $0.91. It has a market capitalisation of $219.43 million and a trading volume of about $5.28 million in the last 24 hours.
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