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Court filings reveal Celsius will run out of money by October

WikiBit 2022-08-16 19:14

Abstract:According to the latest Chapter 11 documents, the embattled crypto lender Celsius Network is on track to run out of money by October.

  According to the latest Chapter 11 documents, the embattled crypto lender Celsius Network is on track to run out of money by October.

  The petition was submitted to the U.S. Celsius stated in the Bankruptcy Court for the Southern District of New York that it expects to reach negative liquidity of approximately $34 million by October 2022.

  The lending platform, which had the trust of many people around the world with their life savings and retirement funds, was revealed to be in a much worse financial situation than had been suggested in July.

  Celsius' three-month cash flow forecast, which shows steep declining liquidity, indicates the company will experience an 80% drop in liquidity funds from August to September, according to court documents released this week.

  According to the forecast, Celsius will continue to report a negative cash flow and will be completely out of money by October. The company expects to generate a negative net cash flow of $137.2 million over the next three months.

  Previous court documents revealed that Celsius “operates one of the largest mining enterprises in the United States” and had expansion plans to “mine Bitcoin by acquiring and making operational additional mining rigs” prior to filing for bankruptcy.

  Many people were upset with me last week when I said @CelsiusNetwork would run out of money and that solutions needed to be implemented faster. I've been told that I don't understand Chapter 11. They have now confirmed that they will run out of funds by October. pic.twitter.com/vBIRIGEmG2 https://t.co/CyzjgKpId7

  August 15, 2022 — Simon Dixon (Beware Impersonators) (@SimonDixonTwitt)

  These findings follow Reuters' report last month that the struggling crypto lending platform had been approved by U.S. Bankruptcy Judge Martin Glenn to build a new Bitcoin mining facility with existing funds up to $3.7 million, with an additional $1.5 million approved to be spent on “customs and duties on imported Bitcoin mining rigs.”

  According to the document, Celsius mines approximately 14.2 BTC per day and owns 80,850 mining rigs, 43,632 of which are operational. Despite the alarming numbers in their cash flow forecast, the amount of Bitcoin the company expects to mine each year is more encouraging. Celsius projected mining more than 10,100 BTC in 2022, with a steady rise to 15,000 BTC in 2023, after mining a total of 3,114 BTC in 2021.

  Despite continuing to mine, Celsius has stopped monetizing the Bitcoin generated by filing Chapter 11 petitions, and the company is now “financially constrained.”

  Celsius has yet to publish a monthly report on its website. The company's most recent statement, issued on July 13, disclosed that their “strong and experienced team” had voluntarily filed for Chapter 11. The company remained upbeat about the bad news, claiming that it is “to provide the company with the opportunity to stabilize its business” in order to “maximize value for all stakeholders.”

  The reaction on social media has been mixed, with some tweeting that the Celsius recovery plan “will be very appealing” to users and others speculating that the price of CEL could reach $100. Despite the cash flow, some believe Celsius can recover, with one user claiming that Celsius is earning $8.5 million per month from Bitcoin and that Celsius will “return stronger.”

  Reuters reported last week that Ripple Labs is “interested in potentially purchasing assets of bankrupt crypto lender Celsius network,” as many speculate on the future of Celsius and potential buyers.

  Ripple Labs clarified on the claims. Ripple Labs, on the other hand, only confirmed previous reports, stating that the company is “interested in learning about Celsius and its assets and whether any of them could be relevant to our business.”

  While Ripple Labs did not say whether it would buy Celsius, it did say that it “has continued to grow exponentially through a market reset and is actively looking for M&A opportunities to scale the company strategically.”

  According to a June 24 article, Goldman Sachs is allegedly “considering” assisting an investor in raising the necessary capital to purchase the digital assets tied up with the struggling lender.

  However, a source stressed that Goldman does not intend to own the digital assets, but rather to act as a broker on behalf of the investor.

  As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!

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