Best printers for Home

Best Mixer Grinder

Best wired Earphones

Best 43 Inch TV in India

Best Wi Fi Routers

Best Home Theatre in India

Smart Watch under 5000

Best Laptops for Education

Best Laptop for Students

<ul><li>US based <keyword id="14181421" type="General" weightage="20" keywordseo="crypto-lender" source="Orion">crypto lender</keyword> <keyword id="93940" type="General" weightage="100" keywordseo="celsius" source="Orion">Celsius</keyword> filed for <keyword id="43550" type="General" weightage="20" keywordseo="bankruptcy" source="Orion">bankruptcy</keyword> under Chapter 11 of the U.S. Bankruptcy Code. </li><li>Fall of <keyword id="2810876" type="General" weightage="50" keywordseo="ethereum" source="Orion">ethereum</keyword>, collapse of Celsius native token and crash of <keyword id="12491859" type="General" weightage="50" keywordseo="terra-luna" source="Orion">Terra Luna</keyword> triggered Celsius collapse. </li><li>Celsius had repaid over $350 million debt before filing for bankruptcy protection. </li></ul> Crypto lender Celsius filed for <a href="https://www.businesswire.com/news/home/20220713005911/en/Celsius-Network-Initiates-Financial-Restructuring-to-Stabilize-Business-and-Maximize-Value-for-All-Stakeholders">bankruptcy protection</a> under Chapter 11 on Thursday. The US-based lender suspended all withdrawals on June 12 and laid off over 500 employees. Despite crypto winter, Celsius had managed to pay off over $350 million of its debt and has $167 million in cash to support the company’s restructuring. Celsius also owes $4.7 billion to its users. The lender had raised over $500 million last October and promised yields over 17%. Today, it does not have sufficient funds to run its operations. What triggered Celsius’s downfall? <div type="twitter" handle="CelsiusNetwork" handlename="Celsius" image="http://pbs.twimg.com/profile_images/1491178826537254916/8JRQDuX0_normal.jpg" favoritecount="2468" retweetcount="1093" status="Moments ago, @CelsiusNetwork filed voluntary petitions for Chapter 11 protection and announced that the company ini… https://t.co/wWzuXjc3sL" createdat="1657758000000" id="1547375324622618624"></div> 1. Collateral used for Celsius loans crashes after Ethereum dip Celsius is a decentralised platform specialising in lending and borrowing crypto. DeFi platforms like Celsius lend ethereum to clients after taking Staked ethereum (stETH) as collateral. The value of stETH mimics the value of Ethereum and customer funds were locked in it. When Ethereum crashed as part of the larger market crash, the value of stETH came crashing down, collapsing the lending ecosystem of Celsius. Currently, Ethereum price stands at $1,101 each. 2. Celsius native token loses value At the time of writing this report, the Celsius native token CEL has dropped 48 percent since the bankruptcy protection announcement. In June 2021, the price of one CEL token was $8.1, with a valuation of $3.4 billion. Currently, the market cap of <keyword id="14181422" type="General" weightage="50" keywordseo="celsius-network" source="Orion">Celsius Network</keyword> stands at less than $90 million. In total, there were over 423 million CEL in circulation and were run on Ethereum blockchain. The crypto market crash, which brought the market value from $3 trillion in 2021 to less than $1 trillion in 2022 also impacted Celsius. The tokens lost their value subsequently. 3. Celsius has already cleared over $350 million debt, but a lot remains The defaulting crypto lender has already cleared loans to decentralised platform Aave, to which they transferred <a href="https://twitter.com/PeckShieldAlert/status/1547041018448859136">$103 million</a>. The lender still owns $8.5 million to Aave. On Wednesday, <a href="https://www.coindesk.com/markets/2022/07/13/celsius-pays-off-last-defi-loan-reclaims-nearly-200m-of-wrapped-bitcoin-from-compound/">Celsius paid</a> $50 million to DeFi lending protocol <a href="https://twitter.com/PeckShieldAlert/status/1547211813645094912">Compound</a>. Celsius also fully repaid its liabilities to MakerDAO which amounted to $223 million. Celsius still owes money to its employees, has to clear bills for restructuring of the company and tackle the volatile market conditions to keep the company intact. 4. US court says Celsius 'deeply insolvent' In its statement on Thursday, Celsius says it will continue to operate. However, a US state Vermont court called it <a href="https://dfr.vermont.gov/consumer-alert/dfr-encourages-celsius-network-investors-proceed-caution">'deeply insolvent'</a>. The Department of Financial Regulation in Vermont said Celsius doesn’t have enough assets and liquidity to be able to honour its obligations to creditors and customers. The Vermont regulator pointed out that some of Celsius's assets were ‘illiquid’, meaning they could be difficult to sell. <a href="https://www.businessinsider.in/cryptocurrency/news/an-ex-employee-at-a-crypto-lender-thats-holding-customer-deposits-hostage-has-sued-the-company-calling-it-a-ponzi-scheme/articleshow/92755984.cms">A former employee</a> of Celsius also sued the company, stating that the company had artificially inflated the price of its token and used customer funds. After the U.S Federal reserve raised interest rates by 75 basis points in June, the crypto market also took a nosedive, mirroring the U.S stocks sell-off. 5. Collapse of Terra Luna and centralised finance companies The belief that crypto was too unstable to invest in was challenged by stablecoin Terra Luna, which mimicked the value of a dollar. In May 2022, this stablecoin crashed, wiping out $500 million from the cryptocurrency market. Soon, centralised finance firms like <keyword id="14202326" type="General" weightage="50" keywordseo="three-arrows-capital" source="Orion">Three Arrows Capital</keyword> and Voyager filed for bankruptcy. Celsius followed suit. All of them cited market volatility as the reason. “This is the right decision for our community and company,” said Alex Mashinsky, co-founder &amp; CEO, Celsius. “I am confident …we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company.”

Explained: Five things to know about US-based crypto lender Celsius’s crash

<ul><li>Celsius Network, which filed for bankruptcy protection on July 14 declared that it owes customers $4.7 billion. </li><li>Celsius’s total liabilities amounted to <a href="https://pacer-documents.s3.amazonaws.com/115/312902/126122257414.pdf">$5.5 billion</a> while its total assets stood at $4.2 billion. </li><li><keyword id="14461524" type="General" weightage="80" keywordseo="celsius-mining" source="Orion">Celsius Mining</keyword>, a crypto mining unit of the embattled crypto lender has also filed for bankruptcy. </li></ul><keyword id="14191867" type="General" weightage="80" keywordseo="celsius-networks" source="Orion">Celsius Networks</keyword>, a US-based crypto lender, which filed for bankruptcy protection on July 14, owes $4.7 billion to its users, the company’s <a href="https://pacer-documents.s3.amazonaws.com/115/312902/126122257414.pdf">61-page court document</a> showed. Celsius’s total liabilities amounted to <a href="https://pacer-documents.s3.amazonaws.com/115/312902/126122257414.pdf">$5.5 billion</a> while its total assets stood at $4.3 billion as on July 13, the document showed. The crypto lender had earlier <a href="https://www.businessinsider.in/cryptocurrency/news/explained-five-things-to-know-about-us-based-crypto-lender-celsiuss-crash/articleshow/92877229.cms">repaid its loans</a> to DeFi lending protocols Aave, Maker DAO and Compound. The collapse of stablecoin Terra Luna in May 2022 has sent the crypto market on a downward spiral and drowned many companies in its wake, including Celsius. Stake ethereum, which was used as collateral for loans on Celsius, also collapsed leading to the company’s downfall. Celsius filed for bankruptcy protection on July 14. The US-based lender suspended all withdrawals on June 12 and laid off over 500 employees. CEO <keyword id="14461523" type="General" weightage="80" keywordseo="alex-mashinsky" source="Orion">Alex Mashinsky</keyword>, in the court filing, said, “The amount of digital assets on the platform grew faster than the company was prepared to deploy. As a result, the company made what, in hindsight, proved to be certain poor asset deployment decisions.” Alongside Celsius, its crypto mining unit Celsius Mining has also filed for bankruptcy. Last year, the company had invested over $500 million in <keyword id="6355055" type="General" weightage="20" keywordseo="usa" source="Orion">USA</keyword>’s bitcoining activities. It was also planning to launch an initial public offering (IPO) after submitting <a href="https://www.prnewswire.com/news-releases/celsius-network-announces-confidential-submission-of-draft-registration-statement-by-bitcoin-mining-subsidiary-celsius-mining-llc-301547547.html">a draft prospectus</a> to US regulator <keyword id="106012" type="General" weightage="50" keywordseo="securities-and-exchange-commission" source="Orion">Securities and Exchange Commission</keyword> (<keyword id="6362470" type="General" weightage="50" keywordseo="sec" source="Orion">SEC</keyword>) in May this year. When the crypto prices came crashing down, miners sold their assets at discount. The crypto market has lost over $2 trillion in value since January 2021. The industry is seeing a wave of bankruptcies and layoffs. Bitcoin touched $19k on Thursday, its lowest since December 2020. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/explained-five-things-to-know-about-us-based-crypto-lender-celsiuss-crash/articleshow/92877229.cms">Explained: Five things to know about US-based crypto lender Celsius’s crash</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/iamai-dissolves-blockchain-and-crypto-assets-council-to-no-longer-represent-crypto-exchanges/articleshow/92880182.cms">IAMAI dissolves Blockchain and Crypto Assets Council, to no longer represent crypto exchanges</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/indian-green-blockchain-startup-raises-100-million-turns-unicorn-in-a-crypto-bear-market/articleshow/92850567.cms">Indian ‘green’ blockchain startup raises $100 million, turns unicorn in a crypto bear market</a>

Bankrupt crypto lender Celsius owes users $4.7 billion, court document reveals

Chhath Puja 2024 Wishes

Bank holidays in India

ChatGPT will let you create images for free

Should the government give freebies to the poor?

World’s most powerful passports

Jio vs Airtel vs Vi Prepaid Plans

You Searched For "Celsiuss crash" and got 2 results

Explained: Five things to know about US-based crypto lender Celsius’s crash

Eetika Kapoor

Bankrupt crypto lender Celsius owes users $4.7 billion, court document reveals

Eetika Kapoor

Popular Keywords

Buying Guides