Just In: Here’s What Celsius Is Doing To Prevent Bankruptcy

Source : coingape.com

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Beleaguered crypto lender Celsius and its affiliates are doing everything to prevent a bankruptcy filing. Moreover, the management is reaching out to its shareholders for solutions. However, Celsius continues to explore loan repayments, layoffs, and CEL short squeeze options in the last few days. This has dropped the liquidation price significantly, but will it be enough?

Meanwhile, the crypto lender just withdrew 30,000 ETH from Aave and 37,000 ETH from Compound and transferred ETH to other addresses.

Celsius Exploring All Options to Prevent Bankruptcy

Celsius has lowered the liquidation price to $11,800 by actively paying back loans. Today, the company paid back 50 million USDC (from an FTX address) for its AAVE position to withdraw 459K LINK from AAVE and 6.2 million DAI (from a Binance address) for its Maker position.

More loan payments will further lower the Celsius liquidation price. This might help the company survive if BTC bottoms soon. Currently, the collateralization ratio has increased to 235% with $462 million in wBTC locked.

Unfortunately, Celsius has laid off around 150 employees as part of the restructuring plan as it faces insolvency. The company had hired restructuring advisors after it paused withdrawals on June 13. The move comes amid massive layoffs by crypto firms including Coinbase, Huobi, and Bybit due to extreme market conditions.

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The company in its blog post on July 1 said it is taking steps to protect assets and explore options such as pursuing strategic transactions and restructuring liabilities.

Meanwhile, Celsius’ CEL token is undergoing a short squeeze as short-seller mass purchase CEL tokens to push the price higher and take profit by withdrawing positions from various exchanges. Celsius just withdrew 1.80 million CEL tokens from FTX. The CEL token prices have soared 20% in the last 24 hours, with the current price trading at $0.90.

The crypto lender has already withdrawn most of its staked Ethereum (stETH) and Ethereum holdings from Bancor to pay off its debt.

BnkToTheFuture’s Celsius Recovery Options

Celsius’ lead investor BnkToTheFuture and its CEO Simon Dixon, holding over 5% of Celsius shares, recommend three proposals related to restructuring and rebuilding to relaunch Celsius and fundraising from Bitcoin whales and the community. Dixon believes a depositors-first approach is the only option and will call for a shareholder’s meeting to resolve the issues.

Varinder is a Technical Writer and Editor, Technology Enthusiast, and Analytical Thinker. Fascinated by Disruptive Technologies, he has shared his knowledge about Blockchain, Cryptocurrencies, Artificial Intelligence, and the Internet of Things. He has been associated with the blockchain and cryptocurrency industry for a substantial period and is currently covering all the latest updates and developments in the crypto industry.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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