Source : coinspeaker.com
Amid its ongoing financial crisis, Celsius has paid off another sizable sum of its debt to Maker as it fights to stay afloat.
The Celsius Network recently paid off an additional $120 million debt towards its Bitcoin (BTC) loan on Maker. Following this development, the new liquidation price for the crypto lender’s WBTC collateral is now at $4,966.
Celsius’ latest debt repayment to decentralized lending protocol Maker took place across three transactions as the loan company stares down a debilitating liquidity crisis. This first came due to the harrowing collapse of the crypto marketplace that has seen Bitcoin (BTC) plunge to new depths in recent weeks. Before this, Celsius had borrowed a large amount on Maker using Wrapped Bitcoin (WBTC) as collateral.
Liquidations occur in decentralized finance when traders cannot repay their loans on time. This results in the creditor protocols automatically selling off the defaulting traders’ collateralized assets. By paying down its Maker debt, Celsius has successfully de-risked its loan position from potential liquidation.
According to on-chain data, Celsius’ repayment obligations remain complex. In addition, the popular crypto loan company also maintains collateralized loans on several lending protocols. For instance, the beleaguered firm still owes $82 million to Maker, $175 million to Aave, and $100 million to Compound.
Celsius Laid Off 23% of Total Work Force Before Maker Repayment
Celsius’ repayment obligations also come amid looming insolvency for the crypto lender. For a few weeks now, the company has carried out a few measures to stave off a collapse triggered by the crypto meltdown.
Most recently, Celsius laid off around 150 employees to better contain its current financial crisis. The downsizing accounts for 23% of the total number of the firm’s staff force. Furthermore, with these layoffs, Celsius becomes the latest crypto-focused company to downsize due to bearish market conditions. Other affected companies are American exchange Coinbase, which axed 1,100 employees in June. Exchanges including Bybit, Huobi, Banxa also did the same, with Gemini laying off 10% of its workforce.
Recap of Key Celsius Moves & Other Related Developments Since Crypto Market Collapse
Just shy of the second week in June, Celsius first froze all customer withdrawals from its platform, citing “extreme market conditions.” In addition, the company also discontinued Swap and transfers between accounts.
Following the account suspension, Celsius moved to enlist assistive financial advice from banking giant Citigroup and a law firm. In that period, the crypto loan company also saw acquisition offers from fellow crypto-transacting platform Nexo.
Towards the end of June, banking powerhouse Goldman Sachs also sought to raise up to $2 billion to acquire Celsius’ distressed assets. However, observers point out that the banking giant is putting together a team of investors and looks to help facilitate the deal for a commission. This is as opposed to Goldman Sachs putting up the required purchase sum all on their own.
As of press time, BTC is changing hands at just over $20K.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.