Celsius owes $2.8 billion, about to run out of money in October

If true to the submitted documents, Celsius is likely to soon fall into fund exhaustion and the net cash flow is at risk of negative $137.2 million by the end of October.

Cryptocurrency lender Celsius filed for Chapter 11 bankruptcy in July, continuing its restructuring and seeking to pay creditors. Therefore, yesterday, August 16, Celsius announced its budget plan for the next 3 months.

According to documents filed in a New York court on August 14, Celsius is indeed “in jeopardy” when it will soon run out of assets.

Kirkland & Ellis forecast that under all current operating, capital, and restructuring costs, the company will be nearly negative 33.5 million USD in October 2022. With that, the expected cash flow could be negative 137.2 million USD at the same time.

As of July 29, 2022, Celsius owed a total of $6.7 billion worth of tokens. The company currently has $3.8 billion in token assets, including $761 million in its own CEL tokens. Thus, the company still owes $2.84 billion. The bigger flaw, however, lies in the company’s token holdings. The company owes $2.5 billion in Bitcoin (104,962 BTC) while it holds $348 million in Bitcoin (14,578 BTC) and $557 million in WBTC (23,348 WBTC).

Not only that, Celsius also holds $1 billion less ETH than it owes its users, even though 410,000 stETH is still owned by the company. Stablecoin USDC also recorded a loss of up to 700 million USD.

To stay afloat until the end of October, Celsius must now own at least $85.4 million, including $13.9 million for employee salaries and $57.3 million for cryptocurrency mining — something CEO Alex Mashinsky hopes. generate enough revenue for the company in the future.

Celsius’s financial situation is very unstable right now. The Texas State Securities Commission (TSSB) earlier this month said it does not want Celsius to continue selling the Bitcoin it has mined because Celsius has failed to establish a suitable creditor payment plan. In addition, the official committee representing Celsius’s unsecured creditors decided to block the company’s Bitcoin sale process.

Sunday’s trial comes a month after chief executive Mashinsky issued a statement in favor of filing for Chapter 11 bankruptcy.

Based on current market prices, CEL’s position would be worth close to $1 billion, more than double what is documented, because CEL has increased by more than 500% from a low of around $0.4 when Celsius went bankrupt and even reached more than $ 4.5 when news appeared that Ripple considered buying Celsius assets to expand the company’s position. At press time, CEL is trading at $2.76.