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Crypto company Celsius is in the process of filing for Chapter 11 bankruptcy, according to a source familiar with those discussions, CNBC is reporting.
The company’s lawyers were notifying individual U.S. state regulators as of Wednesday evening, according to the source, who asked not to be named because the proceedings were private.
Celsius plans to file the paperwork “imminently,” according to the CNBC source.
The Hoboken, New Jersey-based company made headlines a month ago after freezing customer accounts, blaming “extreme market conditions.”
The news marks the latest high-profile crypto bankruptcy as prices plummet.
Voyager filed for Chapter 11 bankruptcy protection last week, after suffering losses due to exposure to now defunct hedge fund Three Arrows Capital.
A judge in New York bankruptcy court froze the fund’s remaining assets this week. That fund is in the process of liquidation proceedings.
“Unfortunately, this was expected. It was anticipated. It does not, however, stop our investigations. We will continue investigating the company and working to protect its clients, even through its insolvency,” said Joseph Rotunda, director of enforcement at the Texas State Securities Board.
Celsius was one of the largest players in the crypto lending space with more than $8 billion in loans to clients and almost $12 billion in assets under management as of May. Celsius said it had 1.7 million customers as of June.
The company was sued last week by a former investment manager who alleged Celsius failed to hedge risk, artificially inflated the price of its own digital coin, and engaged in activities that amounted to fraud.