Celsius spills the beans – his decision to place himself under the protection of Chapter 11 bankruptcy law in the United States, Celsius Network (CEL) revealed to us a ugly $1.2 billion hole in its balance sheet. Today, Celsius details both explanations on his fall, but above all the after possible events, which is even more interested in its aggrieved customers.
Assets that lost $12.3 billion in value in 3 months
If everyone already suspected, today we have more precise figures on at what point the service of ready of Celsius Network a violently suffered the fall of the Bitcoin (BTC) and cryptocurrency market.
The decision to block crypto withdrawals of its customers on June 13, 2022 seems to have been taken while the balance sheet of the company going from neutral to frankly negative. Indeed, in an official document filed on July 18, 2022 with the Bankruptcy Court of the Southern District of New York, we learn more about the state of Celsius.
First painful observation: with the violent crypto winter that we have been experiencing in recent months, Celsius’ total assets under management have gone from more than 22 billion of dollars at only… 4.3 billion. That is a reduction of approximately -17.8 billion dollars!
The loss in value of the crypto-assets held constitutes the bulk of this decline, since they constitute 12.3 billion of dollars of this decline alone. Result: while Celsius was still in equilibrium on March 30, 2022, barely 3 and a half months later, the July 14thhas a 1.19 billion hole dollars between its assets and its liabilities.
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The ‘next steps’ for Celsius and its unlucky clients
At the end of this document, Celsius gives a first indication of the future directions that the company would keep taking. Clearly, Alex Mashinsky’s company (CEO) would rather succeed a restructuring Rather file for bankruptcy or get bought out. In fact, we can read that her goals are :
- Preserve value [des actifs] while negotiating a transaction restructuring comprehensive with the parties concerned;
- Use bitcoins obtained by the operations of mining to contribute to the development of these crypto-mining operations, as well as the growth of bitcoin holdings;
- Consider asset sales and investment opportunities by third parties;
- File and confirm a Chapter 11 plan which will provide (1) the option, at the customer choiceto recover cash (in cash) but at a reduced price or staying “bullish” in crypto(2) maximize returns for affected parties; and (3) reorganize the Celsius business.
Celsius is therefore not giving up, but the scale of the upcoming task – to succeed in its restructuring – seem immense. In this situation, not sure that a large part of its customers would like take the risk of an endless Mt Gox 2.0 (8 years of waiting). So collection lossy we HODL with perseverance, patience and a lot of (hopefully not false) hopes ?
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