Analysis

How does Celsius pay off debt? User funds are still stuck

Celsius paid off $120 million in debt, bringing the asset’s liquidation price down to $4,967. However, the question for Celsius customers is what do the refunds mean for their recovery?

The possibility of Celsius being liquidated is still very low

As updated in Coincu News article, on July 3rd and July 4th, 2022, three major refunds of Celsius were made to the multi-collateral Dai vault number 25977. 64 million, 50 million and 6.2 million DAI were exchanged in transactions. The total amount of such transactions, connected to the value of the dollar, is almost 120 million dollars.

With the above move, this lending platform’s new liquidation price dropped, bringing the WBTC collateral liquidation price from $13,600 to just $4,967.

Borrowing positions on Aave and Compound were also reduced to just $178 million and $100 million, respectively. The above collateral has not decreased but still increased.

Vault borrows DAI on Celsius’s Aave on the morning of July 5, 2022

At present, with the current situation, the money used by Celsius to repay the debt is still unclear where it came from, as well as if there is money, why are they still not opening deposits/withdrawals for users? Although liquidation positions have been reduced, users’ funds are still stuck in the platform.

Meanwhile, accusations that Celsius is trying to cash in on shorting other tokens continue to surface. Specifically, the founder of the Synthetix project, Kain.eth, posted on Twitter accusing a “difficult lending platform” of massively releasing SNX into the market.

Some theories suggest that Celsius is using the rest of the money to try to undo the gauze. They will borrow stablecoins on major DeFi platforms using collateral mostly WBTC and stETH, use these stablecoins to buy tokens, short positions, and release tokens. If this is indeed the way Celsius has been doing in the past few days to get its money back, it would be blatant market manipulation.

However, there is still no clear evidence for these hypotheses.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join CoinCu Telegram to keep track of news: https://t.me/coincunews

Follow CoinCu Youtube Channel | Follow CoinCu Facebook page

Foxy

Coincu News

Victor

Recent Posts

Best Cryptos to Invest in December 2024: Qubetics Surges Past $2.6M as Solana Records Big Whale Pump and Polkadot Aims for $6

Best Cryptos to Invest in December 2024: Qubetics surges past $2.6M, Solana’s whale pump ignites…

53 minutes ago

Bitcoin Trader Turned $100M in His 20s—Now Reveals 5 Altcoins to Build a $50M Portfolio, With Memecoins Leading the Way!

As Bitcoin reaches unprecedented heights and the market surges, he's highlighting five altcoins poised for…

2 hours ago

Which Crypto Will Explode in the 2024-2025 Bull Run?

With the crypto market reaching new peaks, many are eager to discover digital currencies poised…

2 hours ago

Dogecoin and Shiba Inu Approach $1, but All Eyes Are on XYZVerse’s Push to $10!

XYZVerse, blending sports passion with meme energy, is set to make a significant impact, uniting…

3 hours ago

Will Bitcoin Crash or Soar Past $105K in 2024?

Will Bitcoin Crash?" seems to be one of the most controversial questions, as the price…

4 hours ago

The Best Crypto for Passive Income? 10% Weekly Gains and 20% Final Surge—Qubetics Mirrors Cosmos’ Early Success!

There’s always that one coin people wish they hadn’t overlooked. For many, Cosmos ($ATOM) is…

4 hours ago

This website uses cookies.