Celsius Network Charged Over $3M in Legal Fees

Beleaguered crypto lending platform Celsius Network has incurred more than $3 million in legal fees, according to a filing shared on Friday. 


The bankruptcy proceedings, which have been costly for Celsius Network, is an understatement, and per the filing, law firm Kirkland and Ellis is charging the company the sum of $2.6 million in fees for representing it in its bankruptcy proceedings from July 13 and July 31.

The company was also charged the sum of $750,000 in fees by Akin Gump for its services between July 13 and August 31.

These massive legal fees give a peak into the costs being incurred by crypto companies that have gone bankrupt, including Voyager Digital, Babel Finance, Vauld Group, and Zipmex. While the industry is filled with these bankruptcy cases, Celsius Network stands out as it was the first firm to halt withdrawals on its platform.

Alex Mashinsky, the company’s founder and former CEO, and his team allegedly ran the company to bankruptcy, with the Wall Street Journal noting that the firm operated a higher risk profile than most traditional banks did. 

At present, Celsius Network has been exploring avenues to repay its creditors following its bankruptcy with as many as $2.8 billion in crypto liabilities. For the company to have an amicable settlement where the restructuring or liquidation is favourable to the majority of its creditors, it will still need to incur the services of experts that can help navigate its restructuring process.

As a flagship bankrupt crypto lending firm, the company is neck deep in its proceedings, and according to reports, it may suffer as much as a $40 million deficit according to projections by Kirkland & Ellis. 

The crypto winter has taken out many crypto giants, and what proponents in the space are now looking for now is how the affected companies will bankroll their bankruptcy proceedings with highly cushioned funds.

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Celsius Hires New Lawyers for Restructuring: WSJ

Celsius Network LLC has hired new lawyers to advise the troubled cryptocurrency lender on restructuring, according to a report from the Wall Street Journal (WSJ).

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The much-needed restructuring plan has come as it seeks to escape the recent turmoil in crypto markets, the WSJ said, citing people familiar with the matter.

According to the WSJ report, Kirkland & Ellis LLP lawyers have been called on board to advise Celsius on options, including a bankruptcy filing.

The lawyers have replaced the company’s previous lead restructuring counsel, Akin Gump Strauss Hauer & Feld LLP.

Since the company’s stagnation due to the market plunge, it has been in an unstable liquidity position. As part of its recovery efforts, Celsius has brought on a team of restructuring lawyers and appointed Citigroup to advise it on potential financing options. 

The WSJ reported that Celsius is also reshuffling its board as they appointed two new directors last week.

Customers of the company, who reported $11.8 billion in assets in May and 1.7 million users, have not been able to access their Celsius accounts for nearly a month after it froze user withdrawals as crypto prices plunged.

Celsius was looking to avoid lengthy bankruptcy proceedings, The Block reported citing people familiar with the company’s situation.

On June 30, Celsius shared a blog post with the community saying it was continuing to take “important steps to preserve and protect assets and explore options available to us.” 

“These options include pursuing strategic transactions as well as a restructuring of our liabilities, among other avenues,” said the post. “These exhaustive explorations are complex and take time, but we want the community to know that our teams are working with experts from many different disciplines.”

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GameStop shares jump 26% in after hours trade after NFT division unveiled

The share price of Reddit’s cult-favorite stock GameStop Corporation (GME) jumped by one quarter (in after-hours trading following a Wall Street Journal report on its upcoming NFT division.

The U.S. retail game store giant has been quietly working on an NFT marketplace since May, and ramped things up in October by listing several job openings for Web 3.0 and NFT-experienced software engineers and product marketers.

According to a Jan. 6 report from the WSJ, GameStop has now hired more than 20 people to operate its freshly minted NFT unit.

An unnamed source familiar with GameStop’s plans told the outlet that the unit is building an NFT platform that enables the buying, selling and trading of gaming NFTs, along with establishing key cryptocurrency partnerships.

The marketplace is slated to launch later this year, and the firm is said to be close to penning partnerships with two crypto companies that will share technology and co-invest in the development of blockchain and NFT games, along with other additional NFT projects.

The news was warmly welcomed by after-hour traders who drove the price of GME up 26% since th market close to sit at $162.48 at the time of writing according to Tradingview. After-hours trading (AHT) is often quite volatile due to a lack of liquidity in the market but impacts the price of a stock in a similar way to regular trading.

However, the WSJ’s lack of named sources, or direct confirmation from GameStop has raised the eyebrows of some more conspiratorially-minded GME fanatics. In a post that has 1,100 comments and a 97% upvote ratio on the r/Superstonk Reddit community, user “u/brettmagnetic” questioned if the WSJ article could actually have that much of a bullish effect on after-hours GME trading.

“Sorry, but I don’t believe the movement in price after hours has to do with the WSJ posting about the Gamestop NFT market. I think something else is happening and this article was put out to give the NFT market as the scapegoat for the price increase.”

User “MrFlags69” echoed similar sentiments, arguing that: “The author credited ‘the people’ as the only source I saw. This is anything but journalism.”