Celsius Owes $4.7B To Its Users! Court Filing Reveals
- Celsius Network owes $4.7 billion to its users, according to a court filing
- The crypto lending firm filed for Chapter 11 bankruptcy on Wednesday
Troubled crypto lender Celsius Network owes around $4.7 billion to its users according to a recent court filing by the lawyers of the firm. The CEO Alex Mashinsky has confirmed the debt in the Chapter 11 bankruptcy filing.
Celsius filed for Chapter 11 bankruptcy on Wednesday at the U.S. Bankruptcy Court for the Southern District of New York. This outstanding amount has been calculated after the firm has paid off its institutional debts.
The lender paid off its debt to Compound, an algorithmic, autonomous interest rate protocol, and took back collateral valued at around $200 million. Thereafter, the firm settled the loan provided by Maker Protocol, the issuer of DAI stablecoin. At last, Celsius also paid $453 million in security, getting rid of its entire bitcoin loan.
Furthermore, the 61-paged filing by the crypto lender confirmed that Celsius has liabilities of $5.5 billion and assets of $4.2 billion and out of the liabilities, the most penalties are owed to Celsius users, amounting to $4.7 billion.
“The amount of digital assets on the platform grew faster than the company was prepared to deploy. As a result, the company made what, in hindsight, proved to be certain poor asset deployment decisions,”
Mashinsky stated in the filing.
Furthermore, the court filing also stated that the crypto lender is set to face heavy losses due to poor management, lack of insight, market conditions, and its exposure to UST-LUNA as well.
Meanwhile, as reported by BitcoinWisdom in a previous report, the troubled firm has $167 million cash in-hand which will will offer “ample liquidity to support certain operations during the restructuring process.”
Following the footsteps of Celsius, the mining unit of the crypto lender has filed for bankruptcy alongside its parent company. Interestingly, prior to the breakdown of its parent firm, the mining unit had confirmed its plans for an IPO launch.
According to Mashinsky, approximately one billion dollars worth of Celsius’s funds are currently unavailable for use because they were utilised to finance the company’s bitcoin mining endeavours or investments in an unreleased Ethereum network.
Along with Celsius, crypto service providers Voyager Digital and crypto hedge fund Three Arrows Capital are also in troubled waters.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
