Crypto Lender Celsius Network Says $70M Cash Relief Will Bolster Efforts to Survive the Year

The extra cash from loan repayments, previously believed to be in stablecoins, means a much needed boost for the cash-strapped lender.

AccessTimeIconSep 2, 2022 at 4:59 p.m. UTC
Updated Sep 2, 2022 at 9:15 p.m. UTC

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.

Crypto lender Celsius Network, which is going through bankruptcy proceedings, said a freshly found $70 million pile of cash will likely help it continue operating through the end of 2022.

According to a document filed Thursday by Kirkland & Ellis, the law firm Celsius has hired to help it restructure, Celsius expects “approximately $70 million of proceeds from the repayment of USD denominated loans.”

During a hearing in the U.S. Bankruptcy Court for the Southern District of New York on Thursday, a Kirkland & Ellis lawyer said the loans were mistakenly believed to be in dollar-pegged stablecoins, which the lender wouldn't have been able to use to finance its operations.

CoinDesk - Unknown

The updated cash-flow forecast reveals that Celsius' cash pile will barely last through the year. (Kirkland & Ellis)

The extra money means a much-needed boost to Celsius’ scarce liquidity and will extend its runway to pay its business and restructuring costs as it seeks to find a more durable solution to its cash crunch problem. The firm’s costs far exceed its proceeds from its unprofitable bitcoin mining operation.

Celsius expects to receive the majority of the repayment by Oct. 7. The forecast shows that its disposable cash balance will stand at $42 million by the end of November. Extrapolating its weekly net cash flow, the cash pile will barely last through the end of this year.

The company initially forecasted – without accounting for the loan repayments – that it would run out of cash by October. It later revised its forecast to say it would probably survive till the end of the year, citing $61 million in loans maturing. The document that contains the latest cash-flow forecast declared a slightly greater figure than that, $70 million.

The troubled lender found itself in the middle of a recent insolvency crisis in the crypto industry. The firm filed for Chapter 11 bankruptcy protection in July and later revealed it was $2.8 billion short of crypto holdings that it owed to its customers.


Read more about

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.

CoinDesk - Unknown

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.

Investing in the Future of the Digital Economy
October 18-19 | Spring Studio, NYC