Celsius Network is likely to be in deep trouble. According to the company’s most recent Chapter 11 paperwork, troubled cryptocurrency lender Celsius Network is on schedule to run out of money by October.
Celsius said in a document submitted on Sunday to the United States Bankruptcy Court for the Southern District of New York that it anticipates experiencing negative liquidity by October 2022, which will amount to around $34 million.
The lending platform, in which many people put their life savings and retirement assets, was found to be in a significantly worse financial situation than had been previously believed in July.
This week, court records disclosed that Celsius’ three-month cash flow estimate, which depicts sharply dropping liquidity, predicts that the firm would face a decline in liquidity funds of almost 80% from August to September.
Court documents reveal a negative cash flow for Celsius
According to the estimate, Celsius will continue to record negative cash flow and will be bankrupt by the end of October. The firm anticipates generating a negative net cash flow of $137.2 million during the upcoming three months.
According to earlier court records, Celsius “operates one of the largest mining operations in the United States” and had growth plans to “mine Bitcoin by acquiring and making operational more mining rigs” before declaring bankruptcy.
These revelations resulted after Reuters reported last month that U.S. Bankruptcy Judge Martin Glenn had given the struggling cryptocurrency lending platform permission to use existing funds up to the amount of $3.7 million to build a new Bitcoin mining facility, with an additional amount of $1.5 million permitted to be used for “customs and duties on imported Bitcoin mining rigs.”
According to the paper, the lending platform has 80,850 mining rigs, of which 43,632 were in use, and mines about 14.2 BTC every day. Despite the concerning figures in its cash flow prediction, the firm believes it will mine more Bitcoin each year, which is more encouraging. After mining 3,114 BTC in total in 2021, Celsius anticipated mining more than 10,100 BTC in 2022.