Celsius bankruptcy details disclosure: LUNA to zero, three arrow loan liquidation, high price mining machine......
Tether borrowed $840 million to buy mining machine and liquidated
Colin Wu
Wu said blockchain wechat official account
According to Celsius consulting partner Kirkland & Amp; Ellis' filing with the U.S. Bankruptcy Court for the Southern District of New York, details of how the company, which has 1.7 million users, went bankrupt were widely disclosed.
As of July 2022, Celsius had 1.7 million registered users and 300,000 active users with balances over $100, paying around 5 percent of financial rewards. Celsius has 23,000 retail borrowers with 411 million outstanding loans and 765 million collateral; The company has 47 institutional borrowers with $93 million in outstanding loans and $98.5 million in collateral.
Celsius held assets of $4.3 billion and liabilities of $5.5 billion, accounting for a gap of $1.2 billion, the document said. Of that, only $780 million was in non-user assets. FTX had previously considered buying Celsius but abandoned it after learning about its finances, which it believed had a $2bn hole in its balance sheet.
Celsius invested a large amount of its client funds (a $750 million line of credit) in its own mining business and had $576 million outstanding at the end of May, documents show. It currently has 80,850 mining machines and 43,632 in operation. It's worth noting that prices of Celsius mining machines, most of which were purchased in 2021, are dropping by more than 50%.
In 2021, an error by Eth2 mortgage service provider Stakeholder Cost More than 38,000 ETH as a result.
Celsius suffered less from the LUNA crash, losing just $15.8 million, thanks to the rapid withdrawal of UST. But a market rumor about LUNA caused Celsius to withdraw more than $1 billion in five days, causing a run.
Celsius provided two loans totaling $75 million to Sanarrow Capital, and when 3AC failed to meet margin calls, Celsius liquidated the collateral owned by 3AC, resulting in a loss of $40.6 million.
Tether offered Celsius a loan of $841 million. Celsius reported a loss of $97 million at the time of liquidation. But this time around, Tether apparently went straight to liquidation rather than playing white knight again.
Celsius borrowed money from a private lending platform from 2019 to 2021, but when Celsius tried to pay back the loan in 2021, the other party said it could not repay the collateral. The lender owed Celsius 361 million dollars and 3,765 bitcoins. The document did not disclose the name of the platform.
While Celsius instructed the company to deploy only market-neutral transactions, certain asset deployment decisions were made during its unexpected asset growth that later proved problematic, the document said. While the company took the necessary steps to "unwind" these deployments, unfortunately, the damage was done.
Encryption lawyer @Wassielawyer said comparing the statements submitted by Voyager and Celsius, Voayger made a huge mistake (3AC Loan) and took it seriously. Celsius, which runs a range of junk deals, blamed falling prices and negative news for their current predicament.
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