Celsius Network hires advisors to prepare for potential bankruptcy

According to persons familiar with the situation, the Wall Street Journal reported on Friday that Celsius Network LLC has recruited restructuring specialists from the advising firm Alvarez & Marsal to provide advice on a potential bankruptcy petition.

As the latest indication of the financial market collapse affecting the cryptosphere, the New Jersey-based bitcoin lending firm earlier this month temporarily halted withdrawals and transfers owing to "extreme" market circumstances.

The Wall Street firm Goldman Sachs was seeking to acquire $2 billion from investors, according to a second story from CoinDesk, in order to purchase troubled assets from Celsius.

According to the story, which cited two people familiar with the situation, the planned arrangement would enable investors to acquire the assets at potentially significant discounts if the bitcoin lender declares bankruptcy.

As of a month ago, Celsius has $11.8 billion in assets. Requests for comment from Reuters were not immediately answered by the corporation or Alvarez & Marsal.

The market for digital assets has experienced tremendous volatility in recent months as investors flee riskier investments out of concern that draconian interest rate increases to combat persistent inflation may cause the country to enter a recession.