EquitiesFirst Liable to $439M Debt With Celsius: Report Says
- EquitiesFirst had borrowed up to $361 million in cash and 3,765 bitcoin (BTC) worth almost $79 million from Celsius in 2021.
Troubled cryptocurrency lending firm, Celsius has been confirmed creditor of up to $439 million to EquitiesFirst, a global institutional investment firm specializing in equity-backed financing.
A few days after Celsius announced it had filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York, details of debts owed to the crypto lender company have aired as a Friday report revealed that EquitiesFirst is owing Celsius a total of $439 million.
Into the Roots of EquitiesFirst and Celsius Relationship
In light of the bankruptcy filing held recently, Celsius disclosed that it had liabilities of $5.5 billion and $4.3 billion of assets, of which EquitiesFirst was discovered to be an unidentified debtor of the company. The specialist finance firm had borrowed up to $361 million in cash and 3,765 bitcoin (BTC) from Celsius in 2021.
The total bitcoin borrowed is currently worth almost $79 million.
A statement from EquitiesFirst reads;
“EquitiesFirst is an ongoing conversation with our client and both parties have agreed to extend our obligations.”
EquitiesFirst did not directly borrow the sum from Celsius, according to the report. The lending deal between Celsius and EquitiesFirst began to emerge in 2019. Celsius had borrowed an undisclosed amount from EquitiesFirst on a secured basis to support its operations, at the time.
Celsius later took the move to repay one of the loans 2 years after, intending to retrieve back the collateral it had pledged earlier. Unfortunately, Celsius was informed that its collateral could not be returned on a “timely basis.”
This incident switched Celsuis’ status as a borrower to being owed a whopping amount of up to $509 million by EquitiesFirst on an unsecured basis. The loan deal was confirmed overcollateralized as the collateralized assets were greater in value than the amount borrowed.
Although the debt was initially valued at $509 million at the time it emerged, the report revealed that the specialist finance firm has been paying the debt slowly since September last year. EquitiesFirst is currently repaying $5 million to Celsius every month.
Celsius is apparently one of the crypto lending platforms the recent market slump has greatly affected. The market crash has caused the lending firm to struggle incredibly with liquidity issues which caused it to file for bankruptcy protection a few days ago.
The financial struggles of the firm has affected the funds of customers and investors who have their assets in the custody of Celsius. However, the bankruptcy filings revealed that the lender firm has a $5.5 billion liability which is mostly owed to its users. Thus, it can be imagined that the sum owed by EquitiesFirst will go a long way in helping Celsius recover the funds of its users.