Troubled Crypto Lender Celsius Repays $113 Million of Loans, Can It Avoid Bankruptcy?
Troubled crypto lender Celsius has been trying every bit to repay pending loans. As per Bloomberg, Celsius repaid an additional $113 million of loan on Monday, July 11.
On Monday, Celsius repaid $78 million in USDC stablecoin to decentralized lending platform Aave, as per data on Etherscan. Similarly, it also repaid $35 million worth of DAI stablecoin on Compound. Since the start of this month, crypto wallets belonging to Celsius have paid more than $300 million in loans to different platforms.
As per the tracker on Zapper, Celsius still has a total of $120 million in outstanding debt on Aave and Compound. All these decentralized lending platforms have some collateral put forward by Celsius at the time of taking loans. However, this collateral can get automatically liquidated in certain circumstances when Celsius fails to repay the amount.
Celsius froze user withdrawals last month in June and has been working on paying off its debts. As reported by Bloomberg:
Celsius’s sources of funding to pay back the loans are unclear. The company didn’t respond to a request for comment. The distressed lender has provided limited guidance since halting withdrawals on June 12. On June 30, the company said it’s exploring options such as “strategic transactions as well as a restructuring of our liabilities.”
Can Celsius Networks Avoid Bankruptcy?
Last Sunday, July 10, Wall Street Journal reported that Celsius has hired new lawyers for restructuring advice. Citing people familiar with the matter, WSJ reported:
Celsius brought on lawyers from Kirkland & Ellis LLP to advise on options including a bankruptcy filing, replacing the company’s prior lead restructuring counsel.
While other troubled crypto lenders like Voyager Digital and Three Arrows Capital have filed for bankruptcy, Celsius is not much willing to take this route. Celsius said that many of its retail clients want to avoid the proceedings that follow after declaring bankruptcy. As Celsius continues to make fresh payments, it will be interesting to see if it can avoid bankruptcy.
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