The bankruptcy case of Celsius has disclosed some unwelcome news regarding the condition of the crypto lending platform, including a $1.2 billion shortfall caused mostly by customer deposits.
Celsius CEO Alex Mashinsky signed a chapter 11 bankruptcy petition on July 14 that stated the business had around $4.3 billion in assets vs $5.5 billion in liabilities, creating a $1.2 billion shortfall.
However, the value of the CEL tokens has piqued the interest of some in the crypto world, since the total market cap for CEL tokens is just $321 million, according to CoinGecko statistics.
Celsius owes users over $4.7 billion
Assets, including $600 million in CEL tokens, $720 million in mining equipment, and $1.75 billion in cryptocurrencies, offset the majority of the company’s liabilities, or $4.72 billion in customer deposits.
410,421 Lido Staked ETH (stETH) tokens worth $479 million and yielding 5% APY is included in the crypto assets, but the tokens themselves cannot be exchanged for Ether (ETH) until the Ethereum network switches to Proof-of-Stake consensus in the Merge.
According to a letter signed by Celsius CEO Alex Mashinsky, the firm may also sell Bitcoin (BTC) produced by its Celsius Mining Bitcoin mining operation in order to “create sufficient assets” to pay off at least one of its debts and generate future revenue for the business. By 2023, the business anticipates producing around 15,000 BTC.
Cory Klippstein, the founder of Swan Bitcoin, has criticized Celsius and Voyager for choosing Chapter 11 protection over the Securities Investor Protection Act recently (SIPA).
The cryptocurrency lender closed its latest loan on Tuesday by repaying Maker for $223 million, Aave for $235 million, and Compound for $258 million.
Due to this, the company was able to regain tokens worth about $1.4 billion, the majority of which were held in the form of wrapped bitcoin (wBTC) and a certain sort of staked ether derivative (stETH).