“DO NOT file for bankruptcy”: Drew Niv warns crypto firms after Celsius’ Chapter 11

Rick Steves

“…From now to 2025, lawyers from all sides will be feasting on the cash in the estate.”

Drew Niv

Celsius Network has filed for bankruptcy following a hell month for the crypto lender and its executive team led by Alex Mashinsky. More on how Celsius became deeply insolvent, here.

Vermont’s financial watchdog DFR announced Celsius commenced voluntary Chapter 11 bankruptcy proceedings in the U.S. Bankruptcy Court for the Southern District of New York.

The trading industry is closely watching how Celsius is dealing with its solvency issues as the firm is unlikely to be the last within the digital asset space to face such hurdles.

Every each decision at this point in time is a difficult one, with pros and cons, and Celsius chose to file for Chapter 11. There are, however, arguments against that decision.

Years of fees will rob 20% plus of the estate’s funds

FX industry dinosaur Drew Niv, who co-founded FXCM and is now an investor/exceutive at TradingTools, has come forward to share his knowledge and advise troubled crypto firms not to file for bankruptcy.

“A bit of peanut gallery unsolicited advice for crypto firms that are in trouble. DO NOT file for bankruptcy, make a deal any deal even one that wipes out all equity holders, etc. Bankruptcy will take years to play out meaning customers waiting for their money will be waiting till 2025 to see a few pennies from it. Reason it will be pennies is because from now to 2025 lawyers from all sides will be feasting on the cash in the estate.

“Times like these are a bankruptcy lawyer’s dream come true and on large bankruptcies like these years of fees will rob 20% plus of the estate’s funds without making any logical sensical decisions. The fact that status of crypto and customer money is not really tested in courts might make this a 2028 affair.

Distressed deals are always predatory

“If you think I am exagerating look at high profile financial bankruptcies. Lehman Brothers took nearly 14 years to resolve Refco which is more the size of voyager/celsius and others took 5 years for customers to get their money back (21 cents on the dollar for retail FX customers). Distressed deals are always predatory. Been on both sides so am an expert, take the deal and move on, your days as founders/management are over, go start fresh.”

Drew Niv’s FXCM faced its own nightmare following the Swiss peg flash crash in January 2015. The broker was banned from the United States and its former parent company, Global Brokerage, Inc. filed for bankruptcy on December 11, 2017, coming into effect in February 2018.

Global Brokerage shareholders lost over 98% of their investment since January 2015 and FXCM Group is now owned by Jefferies through its subsidiary Leucadia.

FXCM was banned from the United States and sold its 40,000 US customer accounts to Gain Capital (now part of StoneX Group) at about $375 each.

Read this next

Digital Assets

Crypto.com secures preliminary approval to operate in Canada

Crypto.com, one of the longest-established crypto platforms, has become the first digital asset platform to sign a Pre-‘Registration Undertaking’ with the Ontario Securities Commission (OSC) in Canada.

Retail FX

CySEC hits IC Markets One with regulatory warning

The Cyprus Securities and Exchange Commission has once again stepped up its fight against unauthorized brokers.


XTAGE now offers bitcoin and ether trading to 3.6M Brazilian investors

Brazilian financial services giant XP has officially launched its crypto trading platform XTAGE, which was built on major American stock exchange Nasdaq’s trading technology.

Institutional FX

FX volume drops 7pct at CLS Group in July 2022

FX settlement specialist CLS Group today reported that the executed volumes of currency trading on its platforms were notably down in July.

Digital Assets

Web3 startup PIP integrates with Binance ecosystem

Web3 payment provider PIP has announced integration with the Binance ecosystem, which allows the firm to vastly develop and propose needed products and improvements that are worthy of competing with others chains.

Industry News

Celsius $750m insurance claims are fraud, says lawyer seeking EU crypto superfund

“It is an intentional deception in aid of a billion-dollar securities offering.”

Institutional FX

DGCX brokers authorized to provide derivatives trading and clearing services

The DFM is looking to provide multiple asset classes such as; equities, ETFs, equities’ futures, crude oil futures, etc. to meet the growing demand from its diversified base of local and international investors.

Digital Assets

EQONEX leaves “crowded crypto exchange space” amid crypto winter

“The recent extreme market volatility and declining trading volumes have added to the headwinds being felt by exchange operators. We take a realistic view that our exchange will not move the needle for us financially over the near-to-medium term.”

Digital Assets

FTX and Paradigm partner for spreads trading: lower risk, lower fees

“This structured spread trading product is the first that will enable crypto investors to utilize cash and carry trades through FTX and Paradigm.”