Celsius Network Suffers $1.2B Hole & Owes Customers $4.7B
Celsius Suffers $1.2B Hole & Owes Customers $4.7B, Filings Show. Celsius Networks’ newly published bankruptcy court filings show the firm faces extremely heavy losses.
Celsius has a $1.2bn hole in its balance sheet, CEO Alex Mashinsky reveals.
$600m of Celsius's assets is its own CEL tokenhttps://t.co/ukE4ZZxRVN pic.twitter.com/WKhkitfz6I
— kadhim (＾ｰ^)ノ (@kadhim) July 14, 2022
Celsius’s 61-page court filing revealed that it has liabilities of $5.5 billion and assets of $4.2 billion. This means that Celsius’ liabilities outweigh its assets by as much as $1.2 billion, the amount of which Celsius is short and insolvent.
This $1.2 billion hole in their balance sheet is the same one that reportedly caused crypto exchange FTX to walk away from a potential deal in late June when FTX CEO Sam Bankman-Fried pointed out Celsius’ “$2 billion hole.”
Within the court filing, it was also shown that Celsius reportedly owes its customers around $4.7 billion in crypto assets, however, multiple crypto experts warn the community not to get their hopes up as it seems unlikely that Celsius will be able to pay their customers back what they owe. Like economist and blogger Frances Coppola who stated “And it specifically says that in the event of bankruptcy, customers might not get all — or indeed any — of their money back.”
Celsius’ CEO’s Response
CEO of Celsius, Alex Mashinsky explained in the filing that the reason as to why Celsius had taken this extreme fall was due to poor asset decisions, stating: “The amount of digital assets on the platform grew faster than the company was prepared to deploy. As a result, the company made what, in hindsight, proved to be certain poor asset deployment decisions.”
Mashinsky also hinted that the recovery strategy for the company might entail utilizing bitcoin produced by its mining activities.
For more info regarding Crypto Alpha and NFTs Alpha. Always follow us at Twitter and Instagram