Crypto Company Celsius Network Bankrupts, Follows Three Arrows Capital's Footsteps

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Finally, crypto firm Celsius Network has filed for bankruptcy, following in the footsteps of Three Arrows Capital (3AC).

In the midst of a bearish crypto market, there are many companies experiencing financial difficulties.

Moreover, Celsius and 3AC also invested in Terra LUNA and UST which have fallen to the ground, scoring fantastic losses and hitting the company's balance.

Of course, the news of the bankruptcy of crypto company Celsius is not that surprising, as some observers had expected.

Crypto Company Celsius Network Finally Bankrupt

According to the Decrypt report, Celsius' Chapter 11 bankruptcy filing indicates that the company's liabilities exceed assets.

Unmitigated, the obligation is worth US$1.2 billion, from a total debt reduction of US$5.5 billion with total assets of only US$4.3 billion.

The total assets have been deducted from Celsius's move which has paid off three large loans from DeFi protocols Aave, Maker and Compound.

This minus obligation ultimately led the crypto company into bankruptcy. This is also the reason why the CEO of crypto exchange FTX, Sam Bankman-Fried, was reluctant to make a deal with Celsius.

Previously, the company had frozen all services, such as withdrawals and deposits, in order to stabilize the company's internals, which they felt had failed with the presence of this bankruptcy filing.

In addition, the filing also mentions Symbolic Capital Partners as its largest secured lender. It is known that the company has 2,000 ETH, worth about US$23 million, which is a kind of guarantee.

It is known, the team's incompetence in managing assets that grew rapidly on the platform became the forerunner of Celsius's bankruptcy.

“As a result, the company did something, which proved to be a poor asset deployment decision. Some of this deployment activity takes time to relax and leaves companies with disproportionate liability when measured against an unprecedented market downturn,” the filing said.

From here, the bearish crypto market has again taken its toll, as the decline in the valuation of crypto assets continues to decline. This is in line with the aggressive steps of the US central bank, the Fed, which continues to act aggressively in raising interest rates.

Moreover, the US inflation rate rose again, reducing risk appetite when the US dollar was more widely eyed by investors as a safe haven.

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