Crypto lending platform, Celsius, has repaid a substantial amount of its outstanding debt to Maker (MKR) protocol since the start of July, signalling that the platform is doing all it can to stave off a complete collapse amid credible rumours of insolvency.
Since July 1, Celsius has repaid $142.8 million worth of Dai (DAI) stablecoins, a stablecoin pegged to the U.S. Dollar, across four separate transactions, according to data from DeFi Explorer. The crypto lender still has $82 million in outstanding debt owed to Maker. Out of $1.8 billion in lifetime investments, the firm’s losses currently stand at $667.2 million, down approximately 63%.
With the loan repayments, Celsius’ liquidation price on its Bitcoin loan has dropped to $4,966.99 per Bitcoin (BTC). The liquidation price reportedly fell by nearly half since Celsius posted a $64 million DAI payment on July 4, hours after reports that the platform had paid $50 million in DAI.
What you should know
- Recall that Nairametrics reported that the Celsius platform announced last month that it was pausing withdrawals, citing “extreme market conditions.” The company also announced it would pause its swap and transfer products, according to a blog post. There is still no clear timeline for resuming withdrawals.
- Celsius is among several crypto blue-chip companies on the brink of insolvency after extreme market conditions triggered historic losses across multiple positions.
- The firm brought on new legal counsel to advise on restructuring and there are several credible reports that United States mega-bank Goldman Sachs was looking to acquire Celsius’ assets soon surfaced to the tune of $2 billion.
- According to a Calcalist reported over the weekend, the platform laid off some 150 employees in a bid to battle its insolvency issues. This number represents 23% of its workforce as the platform has approximately 650 workers according to data from LinkedIn.
- Celsius joins a growing of crypto firms letting go of staff amid bearish market conditions. Coinbase laid off over 1,100 employees in June, with exchanges ByBit, Huobi, Banxa, and several others letting go of staff in the past month.
Despite liquidity issues and signs of an imminent collapse in its business, Celsius was reportedly still paying rewards as of last week. Although Celsius users were still receiving rewards, they were unable to withdraw them due to liquidity constraints.
Prices of Celsius’ CEL token, its native token, are up over 14% for the day as news broke on this development. The token has a market capitalization of $241 million. However, its volume of transactions has dropped compared to the previous day by over 20%.
