Struggling crypto lending platform Celsius has paid off its last major outstanding debt.
This morning, according to Etherscan data, Celsius repaid $50 million in DAI – MakerDAO’s dollar-pegged stablecoin – to the decentralized finance (DeFi) lending protocol Compound. In return, Celsius received his collateral for the loan: nearly $200 million of wrapped bitcoin, or WBTC.
The loan had been over-collateralized, meaning Celsius initially sent compound digital assets beyond the loan to help cover potential losses. The 10,000 WBTC returned to Celsius, at the time of this writing, were worth approximately $198 million. (WBTC is a version of Bitcoin modified to work on Ethereum blockchain.)
Today’s repayment signifies the clearance of the last of Celsius’ major debts to decentralized financial lenders. Last month, the company received $440 million in collateral after repaying a loan to DeFi Protocol Maker. Just yesterday, Celsius also scooped up some $415 million after having greatly reduced its debt with the Aave.
Recovering so much collateral is no mean feat for Celsius. The company came dangerously close to losing these deposits in collateral liquidation several times in May and Juneas falling crypto prices threatened to drop them below 150% of the value of the loans they were supposed to cover.
It remains unclear whether this influx of more than $1 billion in recovered debt collateral, along with the additional cash the company has, will sufficiently cover Celsius’ customer obligations.
Just over a month ago, the lending platform, which offered users high-yield loans of up to 18% on cryptocurrency deposits, suspended all customer withdrawals, exchanges and transfers, citing liquidity concerns. He hasn’t thawed them yet.
The company was one of the first crypto-lending platforms to freeze accounts after markets began crashing in early May, and since then others…Babel Finance, CoinFLEXand Traveler among them – followed suit.
Celsius CEO Alex Mashinsky has been silent on Twitter since late last month, when he reposted a company blog post stating that the Celsius team was “working as quickly as possible to stabilize cash and operations”. The message offered no time frame as to when customer accounts could be unfrozen.
On Sunday, a report revealed that the company had replaced lawyers hired only a few weeks ago to oversee the company’s restructuring process. Just yesterday, Vermont’s financial regulator labeled Celsius “deeply insolvent” and claimed that previous statements made by Mashinsky and other company representatives about the safety of customer funds are “false”. Regulators in Vermont, along with those in at least five other states, are currently studying Celsius on its decision to freeze customer accounts.
Celsius did not respond to multiple requests for comment on this story.
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