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Here’s What Happens If Celsius Prepares For Bankruptcy

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Here’s What Happens If Celsius Prepares For Bankruptcy #Heres #Celsius #Prepares #Bankruptcy Welcome to TmZ Blog, here is the new story we have for you today:

Beleaguered crypto lender Celsius is at high risk of being insolvent and may file for bankruptcy. Meanwhile, the company and its affiliates are trying everything including debt repayments, restructuring, and CEL short squeeze to prevent bankruptcy.

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The FUD rose after bankruptcy filings by Voyager Digital and Three Arrows Capital. Despite paying weekly rewards, the withdrawals are still paused. Moreover, Celsius and its CEO Alex Mashinsky haven’t commented clearly on the available options or disclosed their plans regarding customer funds.

Entities to Interfere If Celsius Prepares for Bankruptcy

Celsius’ decision to freeze customer accounts sent ripples across the industry, raising questions over what will happen to customer funds. According to the terms and conditions of Celsius, if the company becomes bankrupt, customers will not get their funds. Restructuring advisors hired by the firm recommended a bankruptcy filing, but CEO Alex Mashinsky and the management continues to find other solutions.

The company reached its shareholders for possible solutions after FTX refuses to bailout Celsius. One of the most significant recovery options comes from Celsius’ lead shareholder BnkToTheFuture and its CEO Simon Dixon. The “Depositors First” plan offers three proposals to recover Celsius through restructuring, rebuilding, or fundraising from Bitcoin whales and the community.

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At the moment, the community has high hopes over Simon Dixon for making depositors whole. BnkToTheFuture can call for a shareholder meeting to force the proposals.

In his recent tweet, Simon Dixon said:

“IF Celsius Networkmoves to Chapter 11 we have a top tier team to support #DepositorsFirst – We have strategy, we have the ears of the board & we will have the ears of Chapter 11 as we prepared. In that case the strategy shirts to not dump deposits.”

Furthermore, investment bank Goldman Sachs is looking to raise $2 billion to buy assets of crypto lender Celsius, if it prepares for potential bankruptcy. It will make Goldman Sachs’ investors to acquire Celsius assets at big discounts.

As per a recent filing, Celsius has named Alan Jeffrey Carr, CEO of distressed investment management firm Drivetrain, and David Barse CEO of XOUT Capital, as directors. The firm also terminated directors John Stephen Dubel, Laurence Anthony Tosi, and Gilbert Nathan. The newly appointed directors on the board will possibly look to prevent a bankruptcy filing.

In the event of bankruptcy, customers will be considered unsecured creditors and will not have a great chance to win a lawsuit against Celsius.

Crypto Lender Actively Repays its Outstanding Loan

Currently, Celsius is actively repaying outstanding loans from Maker, Aave, and Compound. Moreover, the company has withdrawn ETH positions from Bancor liquidity pools and transferred ETH to wallets for a possible dump.

According to DeFi Explore data, Celsiusmulti-collateral DAI vault 25977 now has an outstanding debt of 41.2 million DAI. The wBTC liquidation price has fallen to $2,722.11 after almost $180 million of Maker loan in July. Also, the collateral ratio has jumped over 1000%, with 21,962WBTC as collateral.

Varinder is a Technical Writer and Editor, Technology Enthusiast, and Analytical Thinker. Fascinated by Disruptive Technologies, he has shared his knowledge about Blockchain, Cryptocurrencies, Artificial Intelligence, and the Internet of Things. He has been associated with the blockchain and cryptocurrency industry for a substantial period and is currently covering all the latest updates and developments in the crypto industry.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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