Celsius nearly filed for bankruptcy due to lack of liquidity and succeeded in paying off millions of dollars in debt, sparking speculation as to where the funds came from.
On June 12, Simon Dixon, CEO of online investment community BnkToTheFuture, told Anders Larsson on YouTube that Celsius lost $6 billion in liquidity support from potential investors after refusing to disclose financial records.
Therefore, in these difficult times, Celsius valued confidentiality more than stability.
Privacy vs Stability
Dixon said he advised Celsius to go to Voyager Digital, a cryptocurrency trading and lending platform that voluntarily filed for bankruptcy two days ago to restructure the company and minimize losses for its customers.
But Larsson decided to ignore his advice, despite Dixon’s tens of millions of dollars invested in the company. Instead, Celsius decided to act differently, and Dixon made him speculate that something more important was going on behind the scenes to turn down such an attractive deal.
“The only reason you don’t seek (a lucrative round of investment) is what else is going on,”
Expert reports suggest Celsius may have hurt customers, but the company continues to carry out plans to increase liquidity and prevent a potential bankruptcy. Since last month, the platform has banned users from withdrawing money until further notice. This situation surprised many investors who took out loans in BTC and plunged the price of $CEL, Celsius’ native token.
How did Celsius pay off debts of over $440 million?
Today, Celsius completed a $81.6 million payment to Aave, reducing its debt from approximately $90 million to less than $8.5 million. This allowed Celsius to recover the 400,000 staked Ethereum (stETH) previously deposited as collateral.
In addition, the company has already paid Maker a total of 23,000 WBTC, which is roughly $440 million, which was close to the liquidation threshold when the Bitcoin price neared $17,600.
All of these payments have significantly reduced the total collateralized debt across all platforms to $8.5 million for Aave and around $50 million for Compound.
But as companies refuse to be more transparent about their actions, the fears surrounding Celcius investors could turn into uncertainty. And the “uncertainty” of business isn’t all that good news. After all, it is the second word for the acronym FUD.