UPDATE 1-Crypto Lender Celsius Network Reveals $1.19 Billion Hole In Bankruptcy Filing

The Celsius network logo and representations of cryptocurrencies are seen in this illustration taken June 13, 2022. REUTERS/Dado Ruvic/Illustration

(Adds details about repository, context, signature)

By Hannah Lang

July 14 (Reuters) – Celsius Network posted a $1.19 billion deficit on its balance sheet in a bankruptcy court filing on Thursday, a day after the cryptocurrency lender filed for Chapter 11.

New Jersey-based Celsius froze withdrawals last month, citing “extreme” market conditions, cutting off access to savings for individual investors and sending jolts through the crypto market.

In the filing in the US Bankruptcy Court for the Southern District of New York on Thursday, Celsius also said it had $40 million in claims against Singapore-based Three Arrows Capital, a crypto hedge fund that filed for bankruptcy earlier this year. this month.

As of July 13, Crypto had around 23,000 outstanding loans to retail borrowers totaling $411 million backed by collateral with a market value of $765.5 million in digital assets, he added.

Crypto lenders have exploded during the COVID-19 pandemic, luring depositors with high interest rates and easy access to loans rarely offered by traditional banks. They lent tokens to mostly institutional investors, profiting from the difference.

But the lenders’ business model has come under scrutiny after a sharp sell-off in the crypto market spurred by the collapse of major tokens terraUSD and luna in May.

Another US crypto lender, Voyager Digital Ltd, filed for bankruptcy this month after suspending withdrawals and deposits. Singapore’s Vauld, a small lender, also froze withdrawals this month. (Reporting by Hannah Lang in Washington; Editing by Chris Reese and Richard Chang)

Comments are closed.