Crypto lender Celsius Network has filed for bankruptcy in the US, according to a filing, a month after it froze customer withdrawals, joining other casualties battered by a rout in digital assets.

Celsius said in a statement that it initiated the proceedings voluntarily to provide it with the opportunity “to stabilise its business and consummate a comprehensive restructuring transaction that maximises value for all stakeholders”.

The company paused all withdrawals as well as some other functions on 12 June citing “extreme market conditions”, a move that sparked further declines in the value of major cryptocurrencies.

Celsius recently hired the law firm of Kirkland & Ellis to handle its restructuring, replacing Akin Gump Strauss Hauer & Feld, people with knowledge of the matter said.

Celsius promised yields of more than 18% to customers willing to lend out their crypto. In turn, it lent those coins to institutional investors, but also was a participant in a slew of decentralised-finance applications. When the TerraUSD (UST) stablecoin and related Luna token collapsed in May, Celsius scrambled to pull its funds out of Terra’s Anchor Protocol, which offered 20% returns on UST deposits. More recently, it suffered as another large holding — a token known as staked ETH, or stETH, which is tied to the value of ether — became largely illiquid and more widely discounted to ether.

The lender is just one of many crypto companies suffering as risky bets turned against them in the current bear market. Another centralised lender, Babel, halted withdrawals, too. Exchange Voyager Digital filed for bankruptcy, while crypto hedge fund Three Arrows Capital was put into insolvency proceedings in the British Virgin Islands and later filed for bankruptcy.

Paid back

In the past month, Celsius paid back all — more than US$900-million — of its debt in decentralised applications Aave, Compound and MakerDAO, according to blockchain data and tracker Zapper.

On 13 June, Celsius reported a charge for collateral of 2 000 ether for the advancement of a cash loan with Symbolic Capital Partners, according to a filing. A similar charge, for 2 545.25 ether, was made in relation to Symbolic on 11 June, according to company filings.