Tuesday, April 23, 2024

Celsius Chapter 11 Bankruptcy Documents Show $1.2 Billion Gap In Balance Sheet

In case you haven’t been following the news regarding the ongoing crypto meltdown, on Wednesday of this week cryptocurrency broker Celsius Inc. filed for chapter 11 bankruptcy.  Celsius was the latest major brokage company to file for Chapter 11. What is less well known, is the scale of the hole Celsius was in.

The chapter 11 documents filed Thursday showed that the crypto lender had a 1.2 billion dollar hole in its balance sheet.

As reported by TheBlock.com:

The documents, filed on Thursday by CEO Alex Mashinsky and the company’s law firm Kirkland & Ellis, show that the official committee of unsecured creditors likely includes “mostly users.” The firm reported $5.5 billion in total liabilities and $4.3 billion in assets.

Source: Mashinsky court filing

The company said has worked to “unwind” most of its open loans and cease asset deployment services until further notice before commencing with the filing of Chapter 11. It chose to do this due to the volatility of the crypto market.

As of the petition date, the company has unwound nearly all of its DeFi loans and what it called “the FTX loan,” with only one loan remaining in an amount of approximately $3.2 million collateralized by $6.6 million in digital assets, it said.

As of July 10, the company held 410,421 staked ETH (stETH), and as a result, approximately $467 million of the Company’s ETH, based on the market value of ETH, is illiquid, but is earning an approximate 5% APY pending the Merge, it added.

The rest of the story is at theblock.com.

As a final note, the entire crypto sector is under severe economic pressure. Another crypto lender Voyager Digital Ltd filed for bankruptcy on July 6 after also suspending withdrawals and deposits.

Source: TheBlock.co, Cnn.com.

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