Celsius bankruptcy filing shows $1.2 billion hole in its balance sheet

Celsius’ Chapter 11 bankruptcy filing confirms that its liabilities outweigh its $1.2 billion in assets.

The filing shows the company owes $5.5 billion to its customers and creditors. But its assets, even after repaying three large loans from the DeFi Maker, Aave and Compound protocols last week, allowed it to recover roughly $1 billion guaranteeonly total $4.3 billion.

This means Celsius is $1.2 billion short and insolvent. It’s what’s left of the “$2 billion hole” that kept FTX CEO Sam Bankman-Fried from wanting to strike a deal with the company, unnamed sources said. The block end of June.

Without the recently recovered $1 billion in collateral, its debts would have exceeded its assets by $2 billion around the time Bankman-Fried met Celsius with Voyager Digital and BlockFi.

A list of Celsius Network’s debts and assets as of July 13, 2022. Credit: Court filing

Celsius froze user funds on June 12, a day after CEO Alex Mashinsky sent out a now infamous tweet claiming that not “even one person” had any issues withdrawing their money from the platform. After the freeze, Celsius posted two more statements on its website explaining that it needed more time to stabilize.

Then, starting last week, the company repaid its three main loans within days.

Among the assets currently on Celisus’ balance sheet as of yesterday’s bankruptcy filing are $600 million of its native CEL token. The token’s price fell to $0.42 yesterday on news of its bankruptcy filing, but has since rebounded to $0.71 at the time of this writing, according to CoinMarketCap.

The filing also lists Symbolic Capital Partners as its largest secured creditor, saying it has 2,000 ETH, worth approximately $23 million at the time of filing, held as collateral by the company. As for its unsecured credits, the largest balance is due to the Pharos USD Fund, a fund domiciled in the Cayman Islands with a claim of $81 million.

Further down the list there is also Bankman Fried Alameda Research, which Celsius owes $13 million.

In a section explaining how Celsius ended up in bankruptcy, he wrote in the filing that the amount of assets on his platform grew faster than expected.

“As a result, the company made what, in hindsight, turned out to be some poor asset deployment decisions. Some of these deployment activities took a long time to unfold and left the company with liabilities. disproportionate to unprecedented market declines”

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