Cryptocurrency lending platform Celsius said the loss of $1.2 billion was the reason it had to declare bankruptcy.
Celsius reveals the cause of bankruptcy
According to filings filed with the bankruptcy court, crypto lending platform Celsius Network admitted to facing a deficit of up to $1.2 billion on its balance sheet – somewhat confirmed rumors that FTX refused to “rescue” the project after seeing a loss of 2 billion USD.
Specifically, the company’s debt and financial obligations are $5.5 billion, while the actual assets are only $4.3 billion. Of which, user debt is $4.72 billion, CEL debt is $210 million, custody debt is $180 million, and other debt is $390 million.
The company’s remaining assets include $170 million in cash, $1.75 billion in various crypto assets, $930 million in lending assets (but up to $310 million at risk of bad debt), $720 million mining equipment, $180 million in custody assets, $600 million in project CEL tokens, and $270 million in other assets.
The company also announced that it had closed most of its loans and stopped lending assets to serve the asset restructuring process under Chapter 11 bankruptcy regulations of the US law. This may be the reason why Celsius has recently made payments of more than $800 million in loans on major DeFi protocols including Aave, MakerDAO and Compound, withdrawing more than $1.1 billion in collateral.
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