Bankrupt crypto lender Celsius owes users $4.7 billion, court document reveals

• Celsius Network, which filed for bankruptcy protection on July 14 declared that it owes customers $4.7 billion.
  
  
• Celsius’s total liabilities amounted to $5.5 billion while its total assets stood at $4.2 billion.
  
  
• Celsius Mining, a crypto mining unit of the embattled crypto lender has also filed for bankruptcy.
  

Celsius Networks, a US-based crypto lender, which filed for bankruptcy protection on July 14, owes $4.7 billion to its users, the company’s 61-page court document showed.

Celsius’s total liabilities amounted to $5.5 billion while its total assets stood at $4.3 billion as on July 13, the document showed. The crypto lender had earlier repaid its loans to DeFi lending protocols Aave, Maker DAO and Compound.

The collapse of stablecoin Terra Luna in May 2022 has sent the crypto market on a downward spiral and drowned many companies in its wake, including Celsius. Stake ethereum, which was used as collateral for loans on Celsius, also collapsed leading to the company’s downfall. Celsius filed for bankruptcy protection on July 14.

The US-based lender suspended all withdrawals on June 12 and laid off over 500 employees.

CEO Alex Mashinsky, in the court filing, said, “The amount of digital assets on the 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.”

Alongside Celsius, its crypto mining unit Celsius Mining has also filed for bankruptcy. Last year, the company had invested over $500 million in USA’s bitcoining activities. It was also planning to launch an initial public offering (IPO) after submitting a draft prospectus to US regulator Securities and Exchange Commission (SEC) in May this year. When the crypto prices came crashing down, miners sold their assets at discount.

The crypto market has lost over $2 trillion in value since January 2021. The industry is seeing a wave of bankruptcies and layoffs. Bitcoin touched $19k on Thursday, its lowest since December 2020.

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