Crypto lender Celsius Network, one of the biggest in the world, has filed for Chapter 11 bankruptcy protection, joining a string of crypto asset organizations that have restructured in response to a severe sell-off in cryptocurrencies this year.

The news is the latest high-profile crypto bankruptcy as crypto values collapse, making Celsius the latest victim of a $2 trillion meltdown that has crippled some of the sector’s most popular companies and left hundreds of thousands of individual investors losing significant amounts of money.

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In a statement released on Thursday, Celsius said it will seek to sustain its business through reorganization “that maximizes value for all stakeholders.” The New Jersey-based cryptocurrency lender has $167 million available cash, which will support certain operations during the restructuring process.

According to a court filing in the U.S. Bankruptcy Court for the Southern District of New York, Celsius reported estimated assets and liabilities on a consolidated basis in the range of $1 billion to $10 billion. Celsius has more than 100,000 creditors.

Moments ago, @CelsiusNetwork filed voluntary petitions for Chapter 11 protection and announced that the company initiated a financial restructuring. https://t.co/vf5wsT6TMp

— Celsius (@CelsiusNetwork) July 14, 2022

In the United States, Chapter 11 allows a business that has no capacity to pay its debts to restructure while continuing operations.

This year, as the value of cryptocurrencies plummeted, creditors offering high-yield crypto loans encountered liquidity crisis and consumer repayments, leaving them on uncertain financial ground.

Some dealt with the situation by limiting consumer withdrawals, obtaining funds at depressed prices, or initiating reorganization processes.

Before it halted all withdrawals last month, Celsius had accumulated more than $20 billion in assets by giving depositors interest rates as high as 18 percent. This was in response to a panic flight by clients.

In a statement, Alex Mashinsky, co-founder and CEO of Celsius, said:

A special committee of Celsius’s board of directors disclosed in a press release that Thursday’s filing comes on the heels of a “difficult but necessary decision” made by the company in June to halt withdrawals, swaps, and transfers on its platform in order to maintain stability in the business and safeguard its customers.

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Earlier this month, crypto broker Voyager Digital filed for Chapter 11 bankruptcy protection, while liquidators have been called in for bankrupt crypto hedge fund Three Arrows Capital.

Some companies, such as CoinFlex and Babel Finance, have blocked withdrawals because of a lack of liquidity, while others have managed to avoid insolvency by accepting emergency funds at prices much below market value.

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