The crypto firm, which boomed during the COVID-19 pandemic, has run into difficulties recently due to the collapse of a major token in May and the downturn caused by global risk-off sentiment.
Below are some of the firms that have been in trouble recently:
The South Korea-based company behind the dollar-denominated stablecoin TeraUSD and its paired token Luna fell in value in May, fueling the sell-off and igniting a chain reaction.
The company’s co-founder, Do Kwon, announced a “recovery plan” in May, with additional external funding and the rebuilding of TeraUSD, so that it would not rely on an algorithm to maintain a 1:1 peg. be backed by the repository instead.
An official at South Korea’s Supreme Prosecutor’s Office said on June 21 that several employees of Terraform have been put on a no-fly list and cannot leave the country.
The US-based crypto lender said on 6 July that it had filed for bankruptcy.
In its Chapter 11 bankruptcy filing, Voyager estimated that it had more than 100,000 creditors and somewhere between $1 billion and $10 billion in assets, and liabilities of similar value.
Three Arrows Capital (3AC)
The Singapore-based crypto hedge fund sought protection from creditors under Chapter 15 of the US Bankruptcy Code, which allows foreign debtors to protect US assets, according to a court filing on July 1.
3AC’s liquidators received permission from a US court on July 12 to issue summons and claim its assets, noting that 3AC’s missing-in-action founder no longer controls its accounts.
New Jersey-based Celsius said it filed for bankruptcy on July 13. According to court filings, it listed assets and liabilities estimated at between $1 billion and $10 billion on a consolidated basis.
A day earlier, Vermont’s Department of Financial Regulation (DFR) said it believed Celsius was “deeply insolvent” and that it had the assets and liquidity to honor its obligations to customers and other creditors. was not.
The Singapore-based company said on July 4 it had suspended withdrawals for more than 800,000 of its customers. In a blog post, Wald said it was facing “financial challenges” due to volatile market conditions.
“The financial difficulties of our major business partners are inevitably affecting us,” the company said, adding that customers have withdrawn approximately $200 million since June 12.
The Hong Kong-based crypto lender said it had temporarily suspended the withdrawal and redemption of crypto assets on June 17, as the company scrambles to pay its customers.
“Due to the current situation, Babel Finance is experiencing unusual liquidity pressures,” the company said, highlighting the high volatility of the digital currency market.
Coinbase Global Inc.
The cryptocurrency exchange said on June 14 that it would cut about 1,100 jobs, or 18 percent of its workforce.
CEO Brian Armstrong said in a blogpost, “It looks like we are entering a recession after a 10+ year economic boom. The recession could lead to another crypto winter, and could last an extended period. “