What just happened? The Celsius Network, one of the largest cryptocurrency lenders, has filed for chapter 11 bankruptcy a month after it suspended all withdrawals, swaps, and transfers between its 1.7 million customers' accounts due to "extreme market conditions." The latest event has left a question mark over whether users will ever be able to access the money they have tied up in the platform.

The Celsius Network was one of the first big casualties of the crypto crash following the collapse of TerraUSD. The decentralized finance (DeFi) platform, which operated by collecting customer deposits that it loaned out to others to earn a return, froze account withdrawals and transfers last month due to "extreme market conditions." Celsius said customers would "accrue rewards" during the pause, though receiving any interest on the held crypto seems like wishful thinking right now.

In the announcement that it had filed for chapter 11 bankruptcy protection, members of the Special Committee of the Board of Directors said: "Today's filing follows the difficult but necessary decision by Celsius last month to pause withdrawals, swaps, and transfers on its platform to stabilize its business and protect its customers."

"Without a pause, the acceleration of withdrawals would have allowed certain customers---those who were first to act---to be paid in full while leaving others behind to wait for Celsius to harvest value from illiquid or longer-term asset deployment activities before they receive a recovery."

Celsius has 100,000 creditors, which could include customers alongside businesses. Its largest unsecured claim is an $81 million from Caymans Island-based Pharos Fund, reports CNBC, and it owes a $12 million unsecured loan to Alameda Research.

The company says it has $167 million cash on hand to provide liquidity to support certain operations during the restructuring process, while its estimated assets and liabilities are listed between $1 billion and $10 billion on a consolidated basis. It is not requesting authority to allow customer withdrawals at this time.

The concern for customers is that they might not get their money back due to the bankruptcy. Celsius' terms and conditions state insolvency proceedings could result in the "total loss of any and all Digital Assets," though the company is looking at restructuring rather than liquidation right now.

CEO Alex Mashinsky said, "We will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company." It's hard to imagine that the many customers who handed their life savings over to Celsius will agree with that statement.