Celsius Network Crisis Tracking
On June 13, digital asset lending platform Celsius Network announced that it would suspend all withdrawals, swaps and transfers between accounts due to extreme market conditions. On the same day, Etherscan data showed that Celsius transferred a total of approximately 111,815 ETH to FTX over the last three days. This indicator provides a real-time tracking of Celsius' funding crisis.
Coinbase CEO Says Trading Activity Rising, No Plan to Buy FTX US
KingData News: Crypto exchange Coinbase Global Inc. said it’s seeing increased activity on its trading platform following the drama over the potential acquisition of FTX by Binance. The liquidity crunch that prompted Binance’s tentative agreement with FTX wouldn’t happen at Coinbase because the company doesn’t engage in “risky behaviors,” Chief Executive Officer Brian Armstrong said in a Bloomberg Television interview. Coinbase doesn’t have a plan to try and buy FTX US, the American affiliate of FTX, which is not a part of the Binance deal, according to Armstrong. Armstrong said that he hoped the financial troubles faced by FTX won’t “taint” regulators’ view of the crypto industry.
Court Approves Officer for Customer Privacy in Potential Celsius Sale
KingData News: The court has approved Lucy Thomson as consumer privacy ombudsman to the Celsius bankruptcy case to protect customer data in the event of a sale. Thomson has acted as a consumer privacy ombudsman in 25 federal bankruptcy cases since 2008, according to her LinkedIn page. Celsius received approval for its bidding at the start of this week, which set the dates and deadlines for a potential sale.
Judge Approves Celsius' Schedule for a Possible Sale
KingData News: A federal bankruptcy judge has approved Celsius' bidding procedure plans, setting a schedule in motion that could see the platform's assets sold by the end of the year. Celsius plans to solicit bids for the retail asset business, which includes the earn accounts and coin balances, the retail and institutional lending portfolio, its swap services, staking platform, payment feature, decentralized finance arm and any crypto assets it's still holding. It also plans to solicit bids for the "remaining assets," which would include the mining business. Today's order sets dates and deadlines related to a possible sale, authorizes Celsius to select a stalking horse bidder if it chooses to do so and sets the layout for a sale, directing the lender to enter a sale order that the court and creditors would have to approve. The order sets a Dec. 12 deadline for final bids. An auction, if necessary, would be slated for Dec. 15. Once a winner is selected, a sale hearing for any objections or discussion on the sale order would follow on Dec. 22.
Celsius Customers to Battle Investors for Money From Mining Rigs
KingData News: Celsius Network LLC customers will likely have to fight with large investment funds over who gets to cash in on the bankrupt crypto lender’s most valuable assets. Investors including venture capital firm WestCap Management LLC and pension fund Caisse de Depot et Placement du Quebec (CDPQ) believe their equity stakes in Celsius entitle them to value that flows from the company’s crypto mining business and its loan book, among other assets, according to court papers. Customers owed billions of dollars in crypto don’t have claims against those assets, Dennis Dunne of Milbank said on behalf of certain equity holders in a bankruptcy court hearing Thursday.
Prime Trust Dispute Settled, Fee Examiner Appointed at Celsius Hearing
KingData News: Crypto custodian Prime Trust agreed to return about $17 million to Celsius in crypto to the embattled lender at today's hearing. Prime Trust previously held nearly $120 million in assets for Celsius and returned the majority of those funds when the relationship dissolved, but Celsius sued for the return of the final $17 million that it claimed Prime Trust failed to return. At today's hearing, Prime Trust said it would return the funds to a Celsius wallet pending court approval.
Sam Bankman-Fried Hedges on Whether FTX Will Make a Bid for Celsius
KingData News: FTX’s Sam Bankman-Fried discussed the firm’s role in recent bankruptcies, addressing possible moves around future restructurings. He said the firm hopes to start returning funds to Voyager customers “very soon.” He hasn’t ruled out a bid for Celsius, but said he has yet to do a “deep dive” into the possibility.
PeckShield: Former Celsius CEO Transfers 20,000 CELs to "mitrovic eth"
KingData News: According to PeckShield monitoring, the 0x23ce opening ethereum address marked as Alex Mashinsky, former CEO of crypto-lending platform Celsius Network, transferred 3,000 USDC to a Coinbase deposit address and 20,000 CELs (about $20,000) to "mitrovic. eth" In previous news, the address had transferred 120,171 CELs (about $131,000) and converted 5,000 CELs to USDC yesterday.
Independent Examiner Ordered to Produce Interim Report About Crypto Lender Celsius
KingData News: The independent examiner in crypto lender Celsius Network’s bankruptcy will need to produce an interim report detailing Celsius’ financial management and handling of customer accounts, U.S. bankruptcy Judge Martin Glenn ruled Friday during a court hearing. The interim report, expected to be filed in mid-November, will form part of the process to determine who owns the crypto assets held in Custody and Withhold accounts, and under what circumstances Custody and Withhold account holders may access their holdings, according to the ruling.
Celsius Creditors Move to Subpoena Lending Firm Equities First for $439M Collateral Repayment
KingData News: Creditors of crypto lending firm Celsius have moved to subpoena Equities First. The move comes after Celsius's former CEO Alex Mashinsky declared that the company had borrowed money from Equities First, and when they attempted to repay the loans Equities First was unable to return their collateral. Mashinsky said that Celsius is still owed $439 million from Equities First.
Crypto Billionaire Bankman-Fried Eyeing Bid for Celsius Assets
KingData News: Sam Bankman-Fried, the crypto billionaire who has been bailing out distressed industry players in recent months, is considering bidding for the assets of bankrupt lender Celsius Network, according to a person familiar with his deal-making. FTX is also in the process of raising a $1 billion funding round, the same person said. That round hasn’t closed yet or been made public.
Washington State Joins Celsius Bankruptcy Case as Interested Party
KingData News: The bankruptcy case of beleaguered crypto lending platform Celsius has a new interested party: the Washington State Department of Financial Institutions. In a motion filed Thursday evening, the state’s Assistant Attorney General Stephen Manning asked Judge Martin Glenn, who is overseeing the case, to admit him on behalf of Washington’s financial regulator. Securities regulators in Washington, Alabama, Kentucky, New Jersey and Texas began an investigation into Celsius after the company suspended customer redemptions in June.
Celsius Revival Plan Appears to Include Issuing Wrapped Assets
KingData News: A newly leaked recording of Celsius' leadership further details executives' proposal to pay back customers, which includes issuing new wrapped assets to trade on other platforms. The idea is to funnel Celsius' remaining funds allocated to repaying customers into wallets, then issue wrapped tokens, known as Cx tokens, to represent the ratio of how much the firm owes to how much it has on hand. For example, customers waiting to redeem their bitcoin will receive CxBTC tokens. In addition to the redemption mechanism, Goldstein says Celsius plans to enable trading for the wrapped tokens on other venues.
Celsius Applies to Sell Its Stablecoin Holdings to Fund Operations
KingData News: Crypto lending platform Celsius has applied to the court for authorization to sell its stablecoin holdings to help fund operations. celsius currently holds 11 stablecoins with a total value of approximately $23 million.
Celsius Attends Hearings on October 6 and 7
KingData News: Crypto-lending platform Celsius tweeted that it expects to begin the claims process soon, with the next court appearances scheduled for October 6 and October 7, 2022, and that the initial hearing will focus on several issues, including the approval of certain key elements of the claims process, and that discussions with other stakeholders regarding the reopening of certain escrow and hold account holders for re-withdrawals are expected at the October 7 hearing.
FTC Moves to Join Crypto Lender Celsius’ Bankruptcy Case
KingData News: The Federal Trade Commission wants to get involved with failed crypto lender Celsius Network’s bankruptcy case. On Tuesday, two lawyers with the business regulator, Katherine Johnson and Katherine Aizpuru, asked the judge overseeing Celsius’ proceedings for permission to represent the FTC. She also requested a copy of all relevant documents. The requests had not been granted by press time. The regulator has joined previous bankruptcy cases however. In 2015 the agency made a motion tied to RadioShack’s bankruptcy proceedings to limit how much customer information – such as names and purchase histories – could be shared or sold.
Next Hearing in Celsius Bankruptcy Case Set for Sept. 15
KingData News: The Celsius Unsecured Creditors Committee said that on September 14 at 14:00 ET (September 15 at 02:00 GMT) U.S. Bankruptcy Judge Martin Glenn will hold the next hearing in the Celsius bankruptcy case. The court will also reconsider whether it will require Celsius to release the names and other personally identifiable information of account holders.
Celsius Had Been Insolvent Since 2019: Vermont Regulator
KingData News: "By increasing its Net Position in CEL by hundreds of millions of dollars, Celsius increased and propped up the market price of CEL, thereby artificially inflating the company's CEL holdings on its balance sheet and financial statements," Vermont assistant general counsel Ethan McLaughlin declared in the Wednesday filing. "Excluding the Company's Net Position in CEL, liabilities would have exceeded its assets since at least February 28, 2019,” he continued. “These practices may also have enriched Celsius insiders, at the expense of retail investors." At the time of Mashinsky's tweet, McLaughlin says, Celsius lacked sufficient assets to repay its obligations and further experienced unrealized losses of approximately $454 million between May 2 and May 22, 2022.
Celsius Co-founder Declares His Equity is ‘Worthless’ in Court
KingData News: In a Monday document to the United States Bankruptcy Court, law firm Kirkland & Ellis LLP filed a declaration on behalf of Celsius Co-Founder Daniel Leon, confirming his status as a substantial shareholder and declaring that his 32,600 common shares are now considered worthless.
Celsius Wants to Unfreeze $225M in Customer Funds
KingData News: Celsius filed a motion today seeking the authorization to unfreeze a number of customer accounts. The crypto lending platform argued that funds stored in its Custody Program and Withhold Accounts were not in fact company property. At August 29 prices, the Custody Program held about $210 million in funds, while Withhold Accounts had $15 million. A hearing has been set for October 6 at 10:00 EST by the Southern District of New York’s Bankruptcy Court to discuss the matter and possibly authorize the motion.
Crypto Lender Celsius Faces Another Group of Customers Who Want Their Money Back
KingData News: A group of custodial-account holders at Celsius has formally asked the court overseeing the crypto lender’s bankruptcy case to authorize the return of their funds. The group is composed of 64 people who hold at least $22.5 million in cryptocurrencies with Celsius’s custody service, according to the filing. The account holders say Celsius still has in its possession the same type of cryptocurrencies that they deposited, and the funds remain separate from the rest of Celsius’ funds. The firm, therefore, has the ability to allow them to withdraw their funds, it just hasn’t done so.
Bankrupt Crypto Lender Celsius Gets Cash-Injection Offers, Approval to Sell Mined Bitcoin
KingData News: Bankrupt cryptocurrency lender Celsius Network, which disclosed Monday that it was running low on money, said it has gotten several proposals to inject cash into the company and won approval from a U.S. judge to sell bitcoin (BTC) that it mines. A document filed prior to the hearing showed that Celsius mined $8.7 million worth of bitcoin in July; the company’s operational and capital costs exceed that.
Crypto Lender Celsius On Pace to Run Out of Cash by October
KingData News: A new court filing Monday from Kirkland & Ellis, a law firm the crypto lender hired to lead its restructuring efforts, included financial projections that Celsius will run out of cash by October. The filing also stated that the crypto lender holds $2.8 billion less in crypto than it owes to depositors.
Celsius Creditors Move to Block Company From Selling Mined Bitcoin
KingData News: Celsius Network’s unsecured creditors have been pressing the company on “potential misconduct by Celsius and its insiders.” During a hearing in the Chapter 11 bankruptcy proceeding today, the committee moved to block Celsius’s attempts to sell some of its mined cryptocurrency. Attorneys representing the committee wrote in a court filing that they first need more insight into how selling Celsius’s mined Bitcoin will be carried out and how the proceeds from the sale will be used.
Canadian Regulators Probing Crypto Lender Celsius Network Alongside US: Report
KingData News: Canadian regulators are working in tandem with their U.S. counterparts to investigate the impact of New Jersey-based crypto lender Celsius Network’s multibillion-dollar collapse, according to a Financial Post article. The Ontario Securities Commission (OSC) is also investigating how Celsius' collapse and subsequent bankruptcy has affected the platform’s Canadian users.
Bankrupt Crypto Lending Platform Celsius Withdraws Motion to Hire CFO Back at $92,000 a Month
KingData News: Embattled lending platform Celsius has withdrawn its motion to bring back ex-CFO Rod Bolger at $92,000 a month, prorated over a period of at least six weeks, according to a court document filed in the Southern District of New York on Friday. The reason for this is unknown at this time. Bolger reportedly resigned from Celsius on June 30 after just five months as CFO, and the company subsequently filed for Chapter 11 bankruptcy protection in mid-July. In the original motion, Celsius said it needed Bolger to help it navigate the bankruptcy proceedings as an advisor.
Celsius Second Hearing Time Postponed to August 17, 2:00 BST
KingData News: The lending platform Celsius said on Twitter that the work of a creditors' committee made up of its customers is moving forward and that the second hearing has been postponed from the previous date of August 10 to August 17 at 2:00 GMT, at which time the proceedings will move forward.
Celsius Network Custody Clients Tap Lawyer to Reclaim $180M
KingData News: Customers who held cryptocurrency in custody accounts at Celsius Network, the bankrupt trading and lending firm, have banded together to hire legal counsel in a bid to get their money back. The custody claimants, who account for about $180 million, or just 4% of the overall assets locked up in Celsius, are enlisting the services of Kyle J. Ortiz, a partner at the corporate restructuring firm Togut, Segal & Segal LLP.
Celsius Bankruptcy Stings Caisse After $150 Million Investment
KingData News: Quebec’s pension manager broke its silence about its investment in Celsius Network LLC, saying it will “take time” to resolve claims around the bankrupt cryptocurrency lender but admitting the investment didn’t pan out. Caisse de Depot et Placement du Quebec invested $150 million in Celsius in October.
Celsius Updates Hearing Status, Next Appearance on August 10
KingData News: Lending platform Celsius tweets update on hearing, next court appearance set for August 10. Customers can now file a claim against Celisus through Stretto, an insolvency solutions company. In addition, Celsius intends to file a plan that that includes an option for customers to hold cryptocurrencies for the long term.
Celsius First-day Bankruptcy Proceedings Address the Interim Before a Reorganization
KingData News: First-day proceedings of Celsius’s Chapter 11 bankruptcy case took place today, focusing on interim motions to allow the firm to continue operations in the lead up to the reorganization. The day's motions were focused on allocating the funds necessary to maintain critical operations until the restructuring is underway. Judge Martin Glenn appeared amenable to the majority of the requests. However, the Department of Justice's Office of the US Trustee made it clear it's hoping Celsius will provide more transparency going forward, which Glenn sought to accommodate.
Celsius Mining Owned 80,850 Mining Machines and Auctioned Approximately 7,000 Prior to Filing for Bankruptcy
KingData News: According to Celsius bankruptcy filings, Celsius subsidiary Celsius Mining currently has 80,850 miners, of which 43,632 are in operation, and expects to operate 120,000 miners by the end of the year. Celsius Mining produced 14.2 bitcoins per day in the seven days leading up to July 14 and a total of 3,114 bitcoins were produced in 2021 and an estimated 10,118 bitcoins in 2022. Also according to BeInCrypto, Celsius sold about 7,000 mining devices in a confidential auction before filing for bankruptcy.
Celsius Invests Large Amounts of Customer Money in Its Mining Business
KingData News: Kadhim Shubber, a reporter for the Financial Times, wrote that Celsius only raised $600m last year, not $750m as it said at the time. The journalist revealed that Celsius CEO Alex Mashinsky had insisted last year that Celsius would not trade customer funds. However, Mashinsky stated in the aforementioned document that "Once cryptocurrency is transferred to Celsius, except assets transferred pursuant to Custody Service, Celsius has title to the asset and the complete authority to use the asset as it sees fit" . One of the things Celsius did with a huge chunk of its customers funds was invest it in its own mining operation through a $750m credit line. $576M was outstanding as of May.
Celsius Acknowledges $1.2B Hole in Balance Sheet
KingData News: Celsius Network has a $1.3 billion hole in its balance sheet, according to a new court filing from the company's advisory partner, Kirkland & Ellis. The document, which was filed to the U.S. Bankruptcy Court of the Southern District of New York, shows that Celsius holds $4.3 billion of assets and $5.5 billion of liabilities. In its list of assets, Celsius claimed it has about $600 million in its CEL token. However, the company noted in the filing the total market cap for CEL as of July 12 was roughly $170.3 million.
Celsius Has Now Paid off more than $800 million of debt to DeFi apps
KingData News: Celsius has now paid off more than $800 million of debt to DeFi apps. Celsius has been grappling with insolvency triggered by sharp decline in the price of crypto assets. On 12 June, it froze withdrawals and transfers on its centralized lending service.
Celsius Network Initiates Financial Restructuring to Stabilize Business and Maximize Value for All Stakeholders
KingData News: Celsius Network announced that it initiated voluntary Chapter 11 proceedings to provide the Company with the opportunity to stabilize its business and consummate a comprehensive restructuring transaction that maximizes value for all stakeholders. Celsius has $167 million in cash on hand, which will provide ample liquidity to support certain operations during the restructuring process.
Celsius Repaid Approximately 8.4 million USDC to Aave
KingData News: According to PeckShield monitoring, the address associated with Celsius (0x8ace) paid back about 8.4 million USDC to Aave and retrieved about 10.5 million stETH collateral. The address currently has only about $72,400 left in debt with Aave.
Celsius Reclaims $172M Collateral From Aave, Compound
KingData News: Celsius Network paid down $95 million of its debt to the Aave and Compound decentralized finance (DeFi) platforms. The maneuver freed up $172 million of collateral that had been locked in the platforms as collateral. After the moves, the firm still owed $140 million to Aave and Compound, reduced from $235 million as of last Friday, according to DeFi data platform Zapper's dashboard. The collateral that Celsius locked up against those loans stood at $680 million, shrinking from $950 million, and should be freed up theoretically if Celsius fully pays off rest of the debt.
Troubled Crypto Lender Celsius Hires New Restructuring Lawyers
KingData News: Embattled cryptocurrency lender Celsius Network LLC has hired new lawyers for restructuring advice as it navigates the financial fallout from recent turmoil in crypto markets, according to people familiar with the matter. Celsius brought on lawyers from Kirkland & Ellis LLP to advise on options including a bankruptcy filing, replacing the company’s prior lead restructuring counsel, the people said.
KeyFi Founders File Lawsuit Against Celsius, Alleging Celsius Owes Asset Management Fees
KingData News: Jason Stone, founder and CEO of investment firm KeyFi, tweeted that the company had filed a formal lawsuit against Celsius in New York State Supreme Court on July 7. Jason Stone said pursuant to the contracts Celsius signed with KeyFi, they owe KeyFi a significant sum of money. In 2020 Celsius partially acquired KeyFi's assets and team, and KeyFi began managing Celsius customer deposits, Jason Stone said. But Celsius didn't hedge KeyFi's strategy as promised. KeyFi thereafter terminated its relationship with Celsius and closed out the DeFi position, but in the process incurred an uncharacteristic loss that Celsius attributed to KeyFi's mismanagement. Jason Stone said he had previously been working privately with Celsius to resolve the dispute, but filed a lawsuit against Celsius because it was indebted to KeyFi and shifted the blame for the losses to KeyFi.
Celsius Reorganizes Board of Directors Amid Liquidity Issues
KingData News: Crypto lender Celsius Network has reorganized its board of directors as it works to stabilize its liquidity and operations amid the ongoing crypto bear market. Finance executives David Barse and Alan Jeffrey Carr were appointed as directors on June 28 and June 29, respectively. Barse is the founder and CEO of index company XOUT Capital and founder of private family office DMB Holdings. Carr is the CEO of Drivetrain, a fiduciary services firm that leads complex restructurings and litigations and manages portfolios in distressed investments. The executives are now directors alongside Celsius CEO Alex Mashinsky and Shlomi Daniel Leon, Celsius’s co-founder and chief strategy officer. Celsius Network terminated Gilbert Nathan, John Stephen Dubel and Laurence Anthony Tosi as directors at the end of last month.
Celsius Repays $183M on DeFi Exchange Maker, Gets Back Collateral, Blockchain Data Shows
KingData News: Crypto lending platform Celsius Network has once again repaid 34.4 million DAI to decentralized lending protocol Maker, according to on-chain data, CoinDesk reports. The transactions resulted in not only the extinguishment of the debt but the release from Maker of 2,000 wrapped bitcoin (worth $40 million) that had been posted as collateral, the data shows. Since July 1, according to the on-chain data, Celsius has paid down $183 million of its collateralized debt to Maker. Celsius still owes 41 million DAI (about $41 million worth) in loans to Maker, but it has about 22,000 wrapped bitcoin (about $440 million worth) posted against those loans. “By repaying the debt, Celsius is possibly freeing up collateral (BTC) that then can be sold on centralized exchanges or via over-the-counter to meet creditor demands and customer withdrawals,” Fundstrat analyst Walter Teng told CoinDesk.“Given that DeFi loans are overcollateralized, it makes sense for them to do this, as the value unlocked from paying back their loans (collateral less loans) is greater than the value of the loans themselves (should they opt to not repay).”
Celsius Repays $120 Million Stablecoin Debt to Maker Protocol
KingData News: Celsius Network paid off another $120 million towards its Bitcoin loan on Maker. After another $120 million repayment, its new liquidation price sits at $4,967. Celsius had previously borrowed hundreds of millions on Maker using wrapped bitcoin (WBTC) as collateral. By paying down its Maker debt, Celsius has de-risked its loan position from potential liquidation. In decentralized finance, liquidations occur when traders cannot repay their loans on time, and the protocols automatically sell their collateralized assets. On-chain data suggests that Celsius’ obligations are complex and it maintains collateralized loans on multiple lending protocols. The firm still owes $82 million to Maker, $100 million to Compound, and $175 million to Aave.
Celsius Shareholder Bnk to The Future Proposes Three Celsius Recovery Plans
KingData News: Simon Dixon, CEO of Bnk To The Future Capital, an investor holding more than 5% of Celsius, shares three proposed Celsius recovery plans, namely: A restructuring to relaunch Celsius and allow depositors to benefit from any recovery through financial engineering; A restructuring to relaunch Celsius and allow depositors to benefit from any recovery through financial engineering; An operational plan that allows a new entity and team to rebuild and make depositors whole.
Celsius: Seeking Strategic Deal and Restructuring Debt
KingData News: According to the official Celsius update, the team says we are focused and working as quickly as we can to stabilize liquidity and operations. "We continue to take important steps to preserve and protect assets and explore options available to us. These options include pursuing strategic transactions as well as a restructuring of our liabilities, among other avenues. " In previous news, FTX began talks with Celsius about providing financial support or making an acquisition but decided against proceeding after looking at Celsius's finances, , according to a report by The Block. Celsius had a $2 billion hole in its balance sheet and FTX found the company difficult to deal with, one of the sources said.
Celsius Denies Allegations on Alex Mashinsky Trying to Flee Us
KingData News: A spokesperson for Celsius has denied rumors that the company’s CEO tried to flee the U.S. last week amid the ongoing liquidity crisis of the Celsius Network. The representative told Cointelegraph on Monday that the firm continues working on restoring liquidity, stating: “All Celsius employees — including our CEO — are focused and hard at work in an effort to stabilize liquidity and operations. To that end, any reports that the Celsius CEO has attempted to leave the U.S. are false.” Celsius’ statement came shortly after Mike Alfred, co-founder of the crypto analytics firm Digital Assets Data, took to Twitter on Sunday to claim that Mashinsky attempted to leave the country last week via Morristown Airport in New Jersey. (Cointelegraph)
Celsius Seeks Show of Client Support as Lawyers Push for Chapter 11 Bankruptcy
KingData News : According to The Block, citing sources , embattled crypto lender Celsius Network is resisting a recommendation from its own lawyers to file for Chapter 11 bankruptcy — and seeking a show of support from users to help win the internal argument against the suits. Executives at the firm believe many of its clients would prefer Celsius to avoid lengthy and painful bankruptcy proceedings.