Cryptocurrency lenders like Celsius grew during the Covid-19 pandemic (Image: Reuters)

After the price of the token drops drastically, the Celsius network will be the latest victim of cryptocurrency crashes.

On Wednesday, an American crypto lender announced that it had filed for bankruptcy in New York.

Last month, Mr. Seth froze funds due to “extreme” market conditions, which blocked private investors’ access to savings and crypto market volatility.

With a five-year history, the company estimates assets and liabilities of $1 billion to $10 billion and has more than 100,000 creditors. The company’s cash is $167 million.

“This is the right decision for our community and company,” said Alex Mashinsky, co-founder and CEO of Celsius.

My life savings are gone and I was able to ruin my life with Celsius Network

In the Celsius Reddit thread, some still wanted the removal pause to be temporary. The bankruptcy filing burst the bubble and the group then resumed the suicide hotline.

He had all the savings he had saved for 20 years at Celsius. I don’t know what to do. I had a second child on the way and paid off my mortgage. […] I don’t know my wife,” one Reddit user wrote.

Cryptocurrency lenders like Cryptocurrency gained momentum during the Covid-19 pandemic, luring depositors with high interest rates and easy access to loans rarely offered by traditional banks. They mainly gave tokens to institutional investors, so they profited from the difference.

But after a huge crypto market sell-off, major TerraUSD and Luna tokens crashed in May, everything crashed.

Celsius is not the first cryptocurrency lender to suffer this fate. Another US crypto lender, Voyager Digital, filed for bankruptcy this month after suspending withdrawals and deposits. Bold, a small creditor in Singapore, also froze funds this month.

The company said in a statement that it did not seek the authority to allow customers to withdraw, adding that it had asked the court to allow them to continue operations, such as paying employees.

When Celsius froze the funds, it caused a cryptocurrency crash, with the market capitalization below $1 trillion for the first time since January 2021.