Embattled crypto lender Celsius received a second buyout offer this week amid growing concerns over its insolvency.
This offer comes from lender Chainge, which earlier in the week issued a letter of intent to buy out “certain” businesses and assets of Celsius.
Chainge did not specify what assets of Celsius it intends to purchase, but said that it will likely retain all of the lender’s employees after the deal. Chainge said it will issue a definitive announcement on the deal.
The offer is the second buyout deal for Celsius after the lender suspended withdrawals last week, due to a liquidity crunch. Peer Nexo had earlier offered to buy the firm’s debt obligations.
Chainge wants to avoid contagion from Celsius
The crypto lender said a Celsius insolvency would damage the entire crypto market, and that such a scenario should be avoided.
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@CelsiusNetwork potentially facing insolvency affects us all. We strongly believe there is no better way of moving forward than working together towards decentralization.
Lido Staked Ethereum behind recent woes
Celsius’ recent liquidity woes stem from a drop in the value of Lido Staked Ethereum (stETH), a DeFi token commonly used by the lender as collateral.
A drop in the value of the token exposed the token to several margin calls from its lenders, which it was unable to meet. This resulted in several of the lenders positions being liquidated.
Celsius isn’t alone in its exposure to stETH. Hedge fund Three Arrows Capital faced a similar scenario, as did lender BlockFi. The latter recently won a $250 million bailout from crypto exchange FTX.
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