Lawsuits Reveal Celsius Out of Money by October

Lawsuits Reveal Celsius Out of Money by October

Lawsuits Reveal Celsius Out of Money by October

Controversial cryptocurrency lender Celsius Network is on track to run out of funds by October, according to the company’s latest Chapter 11 filings.

Filed in the US Bankruptcy Court for the Southern District of New York on August 14, Celsius emphasized that it is expected to reach negative liquidity to about $34 million by October 2022.

The lending platform, trusted by many around the world with life savings and retirement funds, turned out to be in a much worse financial position than originally suggested in July.

Court documents revealed this week that Celsius’s three-month cash flow forecast, which shows a sharp decline in liquidity, indicates that the company will experience an approximately 80% drop in liquidity funds from August to September.

The forecast predicts that Celsius will continue to report negative cash flow and will be completely cashless by October. Over the next three months, the company is expected to build a negative net cash flow of $137.2 million.

Earlier court documents revealed that Celsius “operates one of the largest mining companies in the United States” and, prior to the bankruptcy, had expansion plans to “mine Bitcoin by acquiring and operating additional mining rigs”.

These findings come after Reuters reported last month that the struggling crypto lending platform was approved by US bankruptcy judge Martin Glenn to build a new Bitcoin mining facility using existing funds worth up to $3.7 million, with an additional $1.5 million amount approved to be spent on “customs and duties on imported Bitcoin mining rigs.”

The document states that Celsius mines about 14.2 BTC per day and owns 80,850 mining rigs, of which 43,632 were operational. Despite the alarming numbers their cash flow forecast suggests, the amount of Bitcoin the company predicts it will mine each year is more promising. After mining a total of 3,114 BTC in 2021, Celsius forecast more than 10,100 BTC in 2022, with a steady increase to 15,000 BTC in 2023.

Despite continuing its mining operations, Celsius has stopped monetizing the Bitcoin generated by filing Chapter 11 petitions, with the company now being “financially constrained”.

Celsius has not yet published a monthly statement on its website. The most recent statement released by the company on July 13 was a disclosure that their “strong and experienced team” had voluntarily filed for Chapter 11 bankruptcy. stabilize its business” to “maximize value for all stakeholders.”

Reactions on social media have been mixed, some people on Twitter are staying hopeful that Celsius’s recovery plan will be “very attractive” to users and others, suggesting that the price of CEL could rise $100. Some firmly believe that Celsius can recover, despite what cash flow suggests, with an user stating that Celsius makes $8.5 million monthly from Bitcoin, adding that Celsius “will return stronger”.

Related: Celsius Network Coin Report Shows $2.85 Billion Balance Gap

With much speculation about the future of Celsius and potential buyers, Reuters reported last week that Ripple Labs is “interested in potentially buying assets from the bankrupt cryptocurrency lender Celsius network.”

CoinTelegraph contacted Ripple Labs to get evidence for the claims. However, Ripple Labs only confirmed previous reports, noting that the company is “interested in learning more about Celsius and its assets and whether they may be relevant to our business.”

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

Goldman Sachs would reportedly “consider” helping an investor raise the capital needed to buy the digital assets tied to the struggling lender, according to a June 24 article.

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