Crypto Crash – Celsius Files for Bankruptcy- What Does This Mean for the World of Crypto
Crypto Crash-Celsius files for bankruptcy- what does this mean for the world of crypto.
We asked Danny Talwar, head of tax at Koinly, a company which specialises in crypto and crypto taxes globally, and has recently launched here in Australia, for his comments.
Commenting on the Celsius news, Danny says: “This could be Mt Gox 2.0. Court proceedings may drag out the process of Celsius customers receiving any of their deposits back well into the future.”
Celsius’s file for bankruptcy today could spell temporary relief for crypto markets. The uncertainty around Celsius has plagued the crypto markets for the past 5 weeks. This Chapter 11 filing allows the crypto markets to breathe a collective sigh of relief, as it likely means Celsius won’t be selling their holdings onto an already depressed market. Investors and consumers of the Celsius products, however, will potentially face long and drawn-out legal proceedings (similar to Mt Gox), with funds unlikely to be paid out in the foreseeable future
“The impacts that this could have on other crypto companies, or the rollout impacts on Australia could also be something to watch. This follows the news that rocked crypto markets over the past month that hedge fund 3AC (Three Arrows Capital) had defaulted on multiple under-collateralised crypto loans (Voyager, Genesis).
Celsius had announced as recently as earlier this week they would be using the same restructuring attorney as Voyager (who had also filed Chapter 11 only days ago)… It is likely that regulators will crack down harder on crypto platforms after this fallout, Celsius was headquartered in New Jersey, after recently being kicked out of the UK (London) by regulators in 2021”