Bankruptcy Ridden Celsius Drops New Update Over Outstanding Loans

Celsius, bankruptcy ridden digital asset lending firm is reportedly not trying to impose payment obligations for outstanding loans. Earlier, Alex Mashinsky, CEO of Celsius resigned from his position. However, he will still be holding the position of director of the firm.

Celsius new update for creditors

As per reports, Celsius during its Chapter 11 proceedings mentioned that it is not seeking to apply payment responsibility for outstanding loans. This includes borrowers not needing to repay the loans.

It added that no penalties or interest will be evaluated post loan maturity in the recent filings. However, a digital asset lending firm filed for bankruptcy back in July. It holds assets and liabilities of around $10 billion. While it has more than 100k creditors.

However, Celsius listed a deficit of around $1.19 billion on its balance sheet. It mentioned around 23K outstanding loans to retail borrowers. These loans cumulative worth around $411 million. As of July 13, 2022, loans are backed by collateral with digital assets whose market value stands around $765.5 million.

This bankruptcy filing came at a time when the global crypto industry was in a historic collapse. This debacle brought down big digital asset firms like Three Arrows Capital and Voyager Digital.

Are shareholders going against crypto lender?

Earlier, Coingape reported that Celsius’s legal trouble got intense amid this crypto downturn. Its shareholders filed a motion in the court to form a committee so that they can get the requisite representation.

It highlighted that the unsecured creditors’ group wants to increase the value of its customers. As of now, there is no single stakeholder who represents Celsius on the table. There is no one presenting the interests of the equity holders.

On the market side, the Celsius token has turned out to be one of the biggest losers over the last 24 hours. Its price is down by around 6%. CEL is trading at an average price of $1.37, at the press time.