Celsius bankruptcy: Crypto lender users use ‘HODL mode’ to resist Chapter 11?
Despite reluctance and disputes with lawyers, Celsius has filed for bankruptcy

The management of Celsius Network has ended its dispute with its lawyers about whether it should file for bankruptcy and initiated Chapter 11 bankruptcy proceedings in the US Bankruptcy Court for the Southern District of New York.
Celsius
According to The Block, Akin Gump Strauss Hauer & Feld had advised the company to seek bankruptcy protection in light of the severe liquidity crisis that engulfed it last month.
On 12 June, Celsius, which held more than $10bn in client assets, froze client withdrawals citing “extreme market conditions”.
With the cryptocurrency market having suffered sizable declines in the previous weeks, the company could not honour its obligations and acted to avoid the crypto equivalent of a bank run.
The lender’s native token, CEL, started the year at $4.39 before sinking as low as $0.17.
Having once reached as high as $1.9bn, CEL’s market capitalisation stood at $172m on Wednesday 29 June.
Chapter 11
Under a Chapter 11 bankruptcy, Celsius client positions are sold into US dollars at the current market price and clients will be added to the list of the company’s creditors. The company is allowed to continue operating while it restructures its debts.
Celsius’ leadership is prevented from making any public announcements due to legal advice.
Some members of staff at Celsius were reluctant to do this, believing instead that many of their clients would prefer not to join a line of creditors attempting to salvage what value they can from the firm’s currently depressed valuation.
Hardcore CEL holders who wished to show their commitment to the token and the company should have the option to enter into ‘HODL Mode’. According to the firm, the security feature allows users to temporarily halt outgoing transactions, and send funds via CelPay.
Surprisingly, despite the firm’s liquidity crisis and decision to halt withdrawals, Celsius has received some deposits.
According to CoinDesk, the prominent investment bank Goldman Sachs is looking to put together a $2bn deal to purchase Celsius’ assets if it goes bankrupt.