Celsius Paid Off The Last Loan Before Filing For Bankruptcy

Celsius paid off the last loan before filing for bankruptcy and the repayment to Compound netted $200 million in collateral so let’s read more today in our latest cryptocurrency news.

The troubled crypto lending platform Celsius paid off the last loan before filing for bankruptcy and paid $50 million in DAI, as the MakerDAO dollar-pegged stablecoin to the DEFI lending protocol Compound. In return, Celsius received the collateral for the loan with $200 million worth of wrapped BTC. The loan was over-collateralized which means Celsius sent Compound digital assets in excess of the loan to help cover the losses and the 10,000 WBTC returned to Celsius as of the writing was worth about $198 million.

Today’s repayment only shows the clearance of the last Celsius major debt to the lenders and last month, the company got $400 million in collateral after paying off the loan to the DEFI protocol Maker. Celsius recovered some $415 million after reducing the debt with Aave. Recouping this collateral is not small for Celsius. The company came close to losing these deposits to collateral liquidation at several points in June when the crypto prices crashed and risked pushing lower than 150% of the value of the loans that were supposed to cover.

It is still unclear whether the influx of over $1 billion in recovered debt collateral will cover the client’s obligations. Over a month ago, the lending platform offered users high-yield loans of 18% on the crypto deposits and paused all customer withdrawals, transfers, and swaps due to liquditiy issues. The company was one of the first crypto lending platforms that froze accounts after markets started crashing in May. Celsius CEO Alex Mashinsky was silent on Twitter but then he posted a company blog post citing that his team was working as fast as they can to stabilize liquidity and operations.

Over the weekend, the reports showed that the company replaced lawyers that were hired a week prior to oversee the restructuring process. The financial regulator of Vermont, labeled Celsius as deeply insolvent and claimed that the statements made by Mashinsky were untrue. Vermont regulators are now investigating Celsius over the decision to freeze customer accounts.