According to filings for bankruptcy, crypto lending platform Celsius Network admitted to facing a deficit of up to $1.2 billion, somewhat confirming rumors that FTX refused to rescue the project after seeing a loss of $2 billion.
Specifically, the company’s debt and financial obligations are $5.5 billion, while the real assets are only $4.3 billion. Of which, user debt is $4.72 billion, CEL debt is $210 million, and many other debts.
The remaining assets include $170 million in cash, $1.75 billion in crypto assets, $930 million in lending assets (but up to $310 million is at risk of bad debt), $720 million in mining equipment, $180 million in custody assets, $600 million in CEL tokens, and $270 million in other assets.
The network also declared to close most of its loans and stop 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.
The latest document shows that Celsius is also lending $75 million to Three Arrows Capital (3AC), a cryptocurrency investment fund that went bankrupt in early July. As 3AC had repaid the loan late, Celsius liquidated the loan’s collateral and suffered a loss of $40 million — an amount the network claimed would require the investment fund to pay back in full.
On the other hand, Celsius borrowed $841 million from Tether. During its difficult period in May and June, Celsius was unable to add more collateral to maintain the loan and accepted Tether to liquidate assets with a loss of up to $94 million. This information was previously confirmed by Tether itself and confirmed it is not affiliated with Celsius.
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