According to the bankruptcy filing, the platform made “certain poor assets deployment decisions” as it grew faster than expected. Celsius Chapter 11 bankruptcy filings confirm that its liabilities exceed its assets by $1.2 million.
According to the filing, the company owes $5.5 billion to clients and creditors. However, its assets are only $4.3 billion after it paid off three large loans from DeFi protocol Maker, Aave and Compound within the last week. This allowed it to reclaim approximately $1 million worth of collateral.
Celsius is now $1.2 billion short of its goal and insolvent. It was the remaining “$2Billion hole” that prevented FTX CEO Sam Bankman Fried from agreeing to a deal with the company. Unnamed sources informed the Block late June.
Without the $1billion in collateral that was recently reclaimed, the debts of the company would have exceeded its assets by $2bn around the time Bankman-Fried was rumored not to have met Celsius with Voyager Digital or BlockFi.
Celsius frozen user funds on June 12, one day after Alex Mashinsky, CEO of Celsius, sent an infamous tweet saying that “not one person” had difficulty withdrawing their money from the platform. Celsius posted two additional statements on its website after the freeze explaining that it needed to stabilize.
In a matter of days, the company had paid off all three major loans it borrowed over the last week.
Celisus has $600 million worth native CEL tokens on its balance sheet, as of yesterday when bankruptcy was filed. According to CoinMarketCap, the token’s value dropped to $0.42 yesterday after the bankruptcy filing. However, it has since recovered to $0.71 at this writing.
The filing also names Symbolic Capital Partners its largest secured creditor. It states that the firm has 2,000 ETH worth approximately $23 million at time of filing. This ETH is being used as collateral by the company. The largest balance owed by unsecured creditors is Pharos USD Fund (a Cayman Islands-domiciled funds with a $81 million claim).
Further down, you’ll find Bankman-Fried’s Alameda Research. Celsius owes $13 Million.
It explained how Celsius ended up bankrupt in a section.
“The Company made poor asset deployment decisions that, in hindsight, turned out to be bad. Some of these activities were difficult to unravel and left the Company with unproportional liabilities, when compared to the market declines.
