$1.19B Deficit Hole Listed on Balance Sheet: Celsius Network

Alex Mashinsky New York state Texas Singapore state New Jersey city Arrow Reuters Digital Southern Platform Arrow Luna network

15.07.2022 - 12:39

Reading now: 424

blockchain.news:

A $1.19 billion deficit was listed on Celsius Network's balance sheet in a court filing on Thursday.

“The amount of digital assets on [Celsius’s] 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,” Chief Executive Alex Mashinsky wrote in a filling, citing a poor investment and unanticipated loss are attributed to its loss, resulting in the disability of returning money to their clients.

"Some of these deployment activities took time to unwind, and left the Company with disproportional liabilities when measured against the unprecedented market declines."

According to Financial Times, The 61-page filing showed the crypto lender with a liability of $5.5 billion, including a $4.7 billion user liabilities. The amount can be translated into a significant loss for these clients that need to face. Its assets value is $4.3 billion. Previously, Reuters reported the company has around 1.7 million in cash on hand.

A day earlier, the cryptocurrency lender had filed for Chapter 11 bankruptcy at the U.S. Bankruptcy Court for the Southern District of New York.

In the filing, New Jersey-based Celsius also said it had $40 million in claims against Singapore-based crypto hedge fund Three Arrows Capital. The hedge fund also filed for bankruptcy earlier this month.

The crypto lender froze all withdrawals and transfers around a month ago, citing unfavourable market situations as the crypto market plunged, cutting off access to savings for individual investors.

Celsius left 1.7 million customers unable to redeem their assets by freezing withdrawals and transfers, which has prompted state securities regulators in New Jersey, Texas