Celsius Chapter 11 Bankruptcy After All Efforts To Pay Off Debt
The cryptocurrency lending platform that has been struggling since the beginning of June until now is Celsius Network has officially filed for bankruptcy.
Celsius chapter 11 bankruptcy
Celsius Network, a cryptocurrency lending/borrowing company that has been experiencing a liquidity crisis since the beginning of June, has filed for bankruptcy in a New York court (USA).
Court documents show that Celsius actively declared Chapter 11 bankruptcy, allowing the company to continue operating during the debt restructuring and prioritizing the interests of creditors above users. The amount of assets declared by the company in the filing is between $1 and $10 billion – of which only $167 million is in cash, with debt levels also in this range.
The company disclosed that it has more than 100.000 creditors, with the largest organizations including Pharos USD Fund SP/Pharos Fund S, Alameda Research, ICB Solutions, The Caen Group LLC, Alameda Research, B2C2, Covario AG and users individual.
As detailed by Coincu News, Celsius is the first lending platform in the “liquidity crisis” that is negatively affecting the entire cryptocurrency market.
The reason Celsius is having trouble stems from the fact that they convert the majority of user deposits to stETH – the token that locks ETH on Lido Finance, which has poor liquidity. When the crypto market corrected violently in early June, coupled with the sharp drop in the price of stETH, Celsius was massively withdrawn by users and had to block all trading/deposit/withdrawal activities since June 13th until now.
The company is said to have hired many legal advisers to conduct operational restructuring and consider the possibility of bankruptcy. At the same time, the company was also scrutinized by legal authorities in many US states to investigate the wrongdoing that led to the current collapse.
Since the beginning of July, Celsius has repaid around $800 million in stablecoins borrowed from DeFi protocols Aave, MakerDAO, and Compound. In return, the company withdrew $440 million in WBTC collateral from Maker, $124 million in WBTC and $417 million in WETH from Aave and, most recently, around $200 million in WBTC from Compound.
Data from the blockchain shows that Celsius has transferred most of the above mortgage to major exchanges like FTX, highly likely to sell to pay off debt and balance the asset report for bankruptcy process.
This is the third crypto company to declare bankruptcy in July 2022, after investment fund Three Arrows Capital (July 2) and crypto investment app Voyager Digital (July 6). All three filed for bankruptcy in New York court.
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.
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Celsius Chapter 11 Bankruptcy After All Efforts To Pay Off Debt
The cryptocurrency lending platform that has been struggling since the beginning of June until now is Celsius Network has officially filed for bankruptcy.
Celsius chapter 11 bankruptcy
Celsius Network, a cryptocurrency lending/borrowing company that has been experiencing a liquidity crisis since the beginning of June, has filed for bankruptcy in a New York court (USA).
Court documents show that Celsius actively declared Chapter 11 bankruptcy, allowing the company to continue operating during the debt restructuring and prioritizing the interests of creditors above users. The amount of assets declared by the company in the filing is between $1 and $10 billion – of which only $167 million is in cash, with debt levels also in this range.
The company disclosed that it has more than 100.000 creditors, with the largest organizations including Pharos USD Fund SP/Pharos Fund S, Alameda Research, ICB Solutions, The Caen Group LLC, Alameda Research, B2C2, Covario AG and users individual.
As detailed by Coincu News, Celsius is the first lending platform in the “liquidity crisis” that is negatively affecting the entire cryptocurrency market.
The reason Celsius is having trouble stems from the fact that they convert the majority of user deposits to stETH – the token that locks ETH on Lido Finance, which has poor liquidity. When the crypto market corrected violently in early June, coupled with the sharp drop in the price of stETH, Celsius was massively withdrawn by users and had to block all trading/deposit/withdrawal activities since June 13th until now.
The company is said to have hired many legal advisers to conduct operational restructuring and consider the possibility of bankruptcy. At the same time, the company was also scrutinized by legal authorities in many US states to investigate the wrongdoing that led to the current collapse.
Since the beginning of July, Celsius has repaid around $800 million in stablecoins borrowed from DeFi protocols Aave, MakerDAO, and Compound. In return, the company withdrew $440 million in WBTC collateral from Maker, $124 million in WBTC and $417 million in WETH from Aave and, most recently, around $200 million in WBTC from Compound.
Data from the blockchain shows that Celsius has transferred most of the above mortgage to major exchanges like FTX, highly likely to sell to pay off debt and balance the asset report for bankruptcy process.
This is the third crypto company to declare bankruptcy in July 2022, after investment fund Three Arrows Capital (July 2) and crypto investment app Voyager Digital (July 6). All three filed for bankruptcy in New York court.
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
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