Crypto lending platform Celsius The company filed for “Chapter 11 bankruptcy” last Wednesday, announcing that the company would continue its restructuring, claiming it would protect the interests of customers. Examining the documents submitted by the company in detail, the experts shared their concerns by stating that there were some “dark” areas in the documents.
According to the shared document, the company has a total of $5.5 billion in “assets and liabilities”, that is, debt, but the company has been found to have assets worth $4.3 billion. It is noteworthy that the difference is 1.2 billion. It is stated that user deposits constitute a large part of the debts with $4.72 billion.
Examining the company’s assets in detail, Celsius has $0.175 billion in crypto assets, 720 million dollars in assets and 600 million dollars in local assets. CEL tokenIt can be seen that they have Although the value of the CEL token decreased to $ 320 million after the events, there seems to be a gap in the data.
Is Celsius Lying?
Economist known for his “skeptical” attitude towards cryptoassets Frances Coppolashared a blog post on Thursday, July 14, outlining Celsius’s concerns regarding its operations. Coppola’s blog post alleges Celsius operates a “shadow bank” that is no different from a regulated financial intermediary with no deposit insurance.
The economist also argued that the depositors in Celsius will not get their money back, continuing the details with the following words:
“Deposits in banks are not even considered “customer assets,” let alone “assets under management.” These are unsecured loans to the bank. So these are the liabilities of the bank and they are at risk of complete bankruptcy. Depositors in a bank have no legal right to return their funds.
Even if the terms of the account state that the customer can withdraw at any time, the bank may refuse to allow customers to withdraw their funds if they do not have the cash to pay them.”
Many market experts believe Celsius should not go into Chapter 11 bankruptcy. Instead of, Securities Investor Protection ActIt was supposed to go to (SIPA).
Swan Bitcoin founder Cory Klippstein explained that filing under SIPA will shift ownership of the firm’s assets to its clients. This would have helped at least some of it return to its investors. Under Chapter 11 bankruptcy, Celsius continues to retain control over the assets.
if @celsiusnetwork and @investvoyager cared about their users they’d file for SIPA bankruptcy as brokers (which they always claimed to be), where ALL proceeds go to customers first.
Filing for Chapter 11 is them saying EXPLICITLY that THE COMPANY OWNS ALL USER ASSETS. pic.twitter.com/FMDzmjRBZO
— Cory Klippsten (@coryklippsten) July 14, 2022
In addition to all these developments, it is stated that the company owns approximately 410,421 Lido Staked ETH (sETH). It should also be noted that these tokens will not be available until the Ethereum Consolidation takes place. On the other hand, allegations that the passwords of the wallet containing 35,000 ETH were lost were also covered in the media.
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Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.