Insolvency proceedings against Celsius enter the first round
7/21/2022, 05:13 AM
Celsius, a crypto platform, has filed for bankruptcy in the US. The court has agreed with the bankruptcy trustee that all transactions must be transparent. It remains to be seen how the case will develop. Celsius is blaming the Terra Luna crisis for its financial troubles.
The company has argued that the majority of customers had lent their crypto assets to Celsius without conditions. The first hearing on the Celsius bankruptcy showed that the crypto platform had a plan for reorganization. However, it is doubtful that this will be enough to save the company.
The management of Celsius, led by CEO Alex Mashinsky, is essentially trying to weather the storm and hope for a recovery in crypto prices and income from Bitcoin mining. However, this may not be enough. The company has admitted to a shortfall of $1.2 billion and, at the time of filing for bankruptcy, had only $167 million left for operations. This means that many creditors will not be paid.
Celsius has stated that all crypto assets deposited as "Earn" on the platform are the property of Celcius. "Earn" was an option popular with small investors that promised up to 19% annual returns. According to Celsius, nearly 77% of customers used this option and are now at risk of losing their money.
The plan proposed by Celsius would allow customers to withdraw their money at a discount or to keep it on the platform until the end of the crypto winter. With rising crypto prices, the company's ability to pay would also increase. However, this does not guarantee that all customers will be paid in full.
The company is also hoping to generate income from a mining farm in Texas. This is not yet operational but could potentially generate substantial revenue. The farm is expected to generate 14.2 BTC per day, or 5183 Bitcoin per year.
Celsius owes its investors crypto assets worth around $4.7 billion. It is clear that the company is in a very difficult situation. Given the additional costs associated with the mining farm, it is unlikely that the company will be able to recover.
The company's plan is to try to weather the storm and hope for a recovery in the crypto markets. However, this is a risky strategy and it is doubtful that it will be successful.
The company has argued that the majority of customers had lent their crypto assets to Celsius without conditions. The first hearing on the Celsius bankruptcy showed that the crypto platform had a plan for reorganization. However, it is doubtful that this will be enough to save the company.
The management of Celsius, led by CEO Alex Mashinsky, is essentially trying to weather the storm and hope for a recovery in crypto prices and income from Bitcoin mining. However, this may not be enough. The company has admitted to a shortfall of $1.2 billion and, at the time of filing for bankruptcy, had only $167 million left for operations. This means that many creditors will not be paid.
Celsius has stated that all crypto assets deposited as "Earn" on the platform are the property of Celcius. "Earn" was an option popular with small investors that promised up to 19% annual returns. According to Celsius, nearly 77% of customers used this option and are now at risk of losing their money.
The plan proposed by Celsius would allow customers to withdraw their money at a discount or to keep it on the platform until the end of the crypto winter. With rising crypto prices, the company's ability to pay would also increase. However, this does not guarantee that all customers will be paid in full.
The company is also hoping to generate income from a mining farm in Texas. This is not yet operational but could potentially generate substantial revenue. The farm is expected to generate 14.2 BTC per day, or 5183 Bitcoin per year.
Celsius owes its investors crypto assets worth around $4.7 billion. It is clear that the company is in a very difficult situation. Given the additional costs associated with the mining farm, it is unlikely that the company will be able to recover.
The company's plan is to try to weather the storm and hope for a recovery in the crypto markets. However, this is a risky strategy and it is doubtful that it will be successful.