Due to a $2 billion hole in Celsius Network’s balance sheet, cryptocurrency exchange FTX has decided not to proceed with the acquisition. Initial plans for Sam Bankman-Fried’s exchange included assuming control of the Network.
The Block received the information from two people who confirmed to them that FTX was pulling out of the agreement. The struggling Network was in contact with FTX about financial support or a takeover, the Block reported on Thursday. But after carefully examining Celsius’s financial situation, FTX made the choice not to proceed.
According to one of the individuals, FTX found it difficult to cope with the Network and also discovered a $2 billion shortfall in its balance sheet. On June 13, Celsius made an announcement just as people were starting to gently recover from Terra’s fall. The crypto lending site stopped trading, transferring funds, and withdrawing funds due to challenging market conditions.
Numerous consumers still can’t access their cash after more than 17 days, and user funds are still frozen. As it was stated on June 19 that the process would be gradual as they continue to improve their operations and liquidity, the platform has been very slow to release any updates.
Although withdrawals are no longer permitted, the network’s crypto lending business still rewards investors every week. It has been referred to as “insulting” by many.
What this signifies is unclear to investors. They are accruing rewards, but there is no mechanism for them to cash them in. Many users used Twitter to express their anger with the business. CEO of Celsius Network Alex Mashinsky stated that the assets were secure in the meantime.
Celsius finally clears the air
Breaking its silence, Celsius publishes a new blog to inform its audience of what is happening. The blog, however, doesn’t appear to give consumers even the tiniest bit of faith that their withdrawals and trading will resume.
According to the blog, the Celsius team is moving fast to stabilize platform operations and liquidity. According to the staff, rapid actions are done to give the community more information.
The team’s various activities are described in detail on the blog. A timetable for when they will resume full platform activity is not specified, though.
Additionally, the Celsius team stated that they are taking the required actions to safeguard the assets. The group emphasizes several procedures, such as liability restructuring, among others. These activities will take time and are complex, according to Celsius.