Celsius, an insolvent cryptocurrency lending platform, yesterday filed a petition for voluntary financial reorganization under Chapter 11 of the US Bankruptcy Code with the New York Bankruptcy court.
The company owed customers and creditors $5.5 billion, but actually held just $4.31 billion in assets, leaving a whopping $1.19 billion short, according to bankruptcy filings.
Separately, FT reporter kadhim tweeted earlier today that Alex Mashinsky, the chief executive of Celsius, had previously insisted to him and another journalist that the company would not embezzling customer funds, while Mashinsky said in the filing:
Once a cryptocurrency is transferred to Celsius, Celsius will have title to the asset, except for the asset transferred under the hosting service, and will have the right to use the asset as it sees fit.
kadhim noted that Celsius had invested funds in its Mining subsidiary, Celsius Mining, through a $750 million line of credit, with $576 million outstanding as of May, the same day that Celsius filed for bankruptcy protection.
(On May this year.
CelsiusMining has also documented in its application that Celsius has been projected to suffer a number of losses, including:
Lost 35,000 ETH in private key loss on Ethereum 2.0 Pledge solution Stakehound (which the company kept under cover for over a year until this June) Lost $15.8 million in Terra Crash Plans to claim $40 million against Three Arrows Capital (3AC), which filed for Chapter 11 bankruptcy Protection Tether filed with C
elsius’ USDT loan has been cleared for nearly $100 million Refuting Allegations of Ponzi Scheme by 0xb1 But in response to reports last week that well-known DeFi whale 0xb1, who claimed to have managed $2 billion of clients’ assets for Celsius, was operating a Ponzi scheme in breach of their contract,
The company strongly rejects the accusation, saying it is a scare by well-intentioned people trying to create mistrust between the company and its users.