Sam Bankman-Fried, is eyeing a bid for the now bankrupt crypto lender, Celsius Network. The FTX CEO has been bailing out troubled firms from bankruptcy. After various bidding attempts, FTX won the highest bid for Voyager’s assets, valued at roughly $1.4 billion. The proposal included a $1.4 billion fair market value and a $111 million additional possibility in increasing importance.
It is unclear if Bankman-Fried’s company wants some or all of Celsius’ assets. According to Celsius, the bid is to happen soon,
The bid for Voyager came after Voyager Digital filed for bankruptcy. Likewise, the proposal for Celsius assets was after Celsius declared bankruptcy. The firm said that Three Arrows Capital, a crypto hedge fund, failed to repay its loan.
The Singapore-based 3-AC filed for Chapter 15 bankruptcy on July 1, 2022. Thus, they appear to be on the run from creditors.
Celsius Bankruptcy
Celsius’ drama was there for a while, but the step toward bankruptcy was visible. Due to severe market conditions, the firm held withdrawals and transfers in early June. The firm filed for Chapter 11 bankruptcy on July 14, 2022. An old tweet from the official page states,
“Moments ago, Celsius Network filed voluntary petitions for Chapter 11 protection and announced that the company initiated a financial restructuring.”
The filing showed that Celsius lies between $1 billion and $10 billion in its assets and liabilities. In addition, the firm has more than 100,000 creditors.
Before the bankruptcy, Celsius carried out Bitcoin mining operations and a crypto custody business. It was a concern for Vermont officials that Celsius has secretly been broken since 2019. Additionally, they stood by the allegations that the CEO, Alex Mashinsky, had false reports to identify that the firm was healthy financially.
After the Filing of Bankruptcy
Several plans to revive the Celsius network have since failed. After filing for bankruptcy, the firm wanted to pay its former chief financial officer, Rod Bolger, about $93,000 monthly for “stability.” The plan received disapproval from some customers as a way of showing anger toward defective leaders.
Mashinsky has been in charge of a series of bad trades in 2022, a cause of the downfall. Thus, he declared his resignation on Tuesday, October 27. The reports brought about different feelings from prominent people, with many supporting the move.
Even the CEO of Coinbase, Brian Armstrong, commented on the issue,
“Glad to see Alex Mashinsky step down. It just sucks he was forced to do it and couldn’t see the writing on the wall in June. This is a new day for Celsius users. There is now a renewed home; we could be somewhat whole .”
Additionally, Mashinsky said he is sorry about people’s difficult financial circumstances. He added that he would assist in uniting behind a plan to bring on the best outcomes for all creditors.
Final Thoughts
The collapse of stablecoin TerraUSD was a significant blow to the crypto sector, leading to a severe liquidity crisis. Celsius’ failure forced vivid scrutiny onto other crypto firms dealing with lending. In the wake of Celsius’ collapse, other firms have also filed for bankruptcy due to unstable market conditions. As a trader, you must hold onto the hope that the markets will reset because they will.
