The following is an excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin magazine premium markets newsletter. To be among the first to receive this information and other on-chain bitcoin market analysis straight to your inbox, Subscribe now.
Read Bitcoin Magazine Pro’s previous articles and updates on Celsius here:
This article will shed light on the details of the Celsius situation following the filing of Chapter 11 Bankruptcy Protection yesterday afternoon. CEO Alex Mashinsky followed up the matter with an official statement released today.
In the statement, among many other interesting notes, it was revealed that the company officially had a $1.19 billion hole in its balance sheet. Unofficially, the numbers are much worse, the most obvious being the $600 million worth CEL token that the company claims as an asset.
The company has also engaged in loans secured with customer deposits to invest in mining through a $750 million line of credit.
Celsius also admitted to taking client funds and speculating directionally in various futures. A good bank/loan office will be sure to match client liabilities with assets, whereas the likes of Celsius were just speculating/gambling.
We haven’t even mentioned the 35,000 ethers that went missing because the private keys were lost. The full filing document can be read here and the problems are deep.
The Chapter 11 bankruptcy filing comes as no surprise in this regard, and the gross negligence of Celsius and other players in the broader bitcoin/cryptocurrency space will surely bring a great deal of new regulation to the platforms. centralized.
The reason for our extensive coverage and documentation of the “contagion” situation in particular is due to the lasting implications of the fallout. Due to the scale, scope and reckless nature of the mismanagement of client funds, along with layers of obscured leverage, billions of dollars of investor funds have been lost and rates asset exchange rates collapsed.
Only with proper recognition and underlying change of the inherent issues that led to the fallout can the future be built on more sustainable ground.
In similar news, in the recent Celsius Chapter 11 Filing for Bankruptcy, a list of the company’s creditors has been published. The largest creditor, identified as Pharos USD Fund SP, has several key ties to industry-leading firm Alameda Research, which has been amid contagion in recent weeks, as the first reported by Bloomberg.
The more documents and filings that come out, the more it is revealed how interconnected the industry was/is between counterparties. With this in mind, we will reiterate our belief that the full impacts of the recent native crypto credit crash have likely not been known or fully felt at this time.
ICYMI: Read the Bitcoin Magazine Pro June contagion report.
