Cryptocurrency lender Celsius Network LLC filed for bankruptcy protection Wednesday, a month after halting withdrawals in the wake of a collapse in digital currency prices that stretched the platform’s business model past the breaking point.
The chapter 11 filing in New York follows weeks of market speculation about Celsius, which built itself into one of the biggest cryptocurrency lenders on a pitch that it was less risky than a bank, and with better returns for its customers. But it overextended itself offering lofty yields to crypto depositors and making large loans backed by little collateral, leaving itself little cushion in the event of a market downturn.