Celsius burns money, but still cannot sell his mined bitcoins
Celsius burns money, but still cannot sell his mined bitcoins
- Celsius assumes that it could reduce 15,000 BTC next year, which has a value of around $ 362 million at current prices
- The competitive lender could use the proceeds for anything but the repayment of the creditors, an insolvency lawyer told Blockworks
Celsius relies on his Bitcoin mining business to support it in restructuring, but creditors and supervisory authorities do not trust his intentions alike.
The bankruptcy of the bankrupt crypto loan is in the minus, so he tries to find liquidity to close gaps and repay the creditors. The closure of Defi loan was first in the first place, but what Celsius now appears most convenient is the internal mining business.
a month ago, Celsius reported liabilities of $ 5.5 billion and assets of $ 4.3 billion, which corresponds to a black hole of $ 1.2 billion. At this point, his cash balance was only $ 170 million.
It is estimated that Celsius owes more than 100,000 creditors $ 4.7 billion.
Bitcoin mining prospects of Celsius
Celsius currently has 80,850 Bitcoin-mining rigs, but only about half are in operation. Before the bankruptcy request, the company planned to extend its business to 120,000 plants by the end of 2022.
The latest forecasts show that Celsius is expected to generate 10,118 BTC ($ 244 million) this year. It believes that it can reduce 48 % more next year, which brings the total amount from 2023 to 15,000 BTC ($ 362 million)-provided that at least 11,000 plants are online.
Celsius says that it reduced 3,114 BTC ($ 75 million) last year, only a small fraction of its entire Bitcoin stock. The companies August submitted that it shows 14.578 BTC and 23,348 packaged Bitcoins, which are worth a total of $ 915 million at current prices.
It is expected that the company will burn cash in the next three months, including the expenditure of around $ 5 million per month for salary statements, which Celsius leaves almost $ 34 million for this quarter with a forecast negative cash flow.
Of course, Celsius cannot rely solely on the mining business to compensate for his epic losses.
But the Texas supervisory authorities do not want Celsius to continue selling his mined Bitcoin. The lender failed to explain how he wants to benefit the creditors by handing over his crypto, said Texas State Securities Board (TSSB).
The official committee, which represents the unsecured creditors of Celsius, has tried to block his attempts to sell mined cryptocurrencies in accordance with the TSSB.
lawyers who represented the committee wrote in a letter from 11 Court files the effects of Celsius on the monetization of his mining business are not clear and asked for more insight.
Celsius said beforehand that it hopes that his mining business will help repayment of creditors, some of whom sent threats and hate mail to the company before going bankrupt Reuters .
Celsius confidence problems
The problem is not that Celsius wants to monetize his mining business. The point is that interested parties are concerned that Celsius is smart about what to do with the money that would generate it.
for Dan Besikof, insolvency consultant at the Loeb & Loeb law firm, Celsius' application is to sell his mined bitcoins, vague, which leads to difficulties in enforcement.
"You are concerned about the width of the desired relief - and I tend to agree with them," said Besikof in an interview with Blockworks. "The relief that Celsius asked is so comprehensive that they could monetize the coins and use the proceeds in a variety of ways."
skeptics could also believe that Celsius is deliberately vague and secretly pursued his own interests strategically.
"Both for the objections of the committee and Texas, there seems to be a lack of trust that Celsius will correctly handle the monetization of his mined bitcoins and the use of the resulting proceeds, based on the numerous allegations of misconduct before bankruptcy and sub-optimal asset management," said Balichof.
according to Besikof, it is probably only a matter of time before communication between Celsius and his opponents is clarified. You will then work out parameters what the monetization of your Bitcoin will look like.
"I think the committee expects Celsius to work and work with the committee to develop a log for the sale or monetization of the Bitcoin, which is acceptable for the committee, and to set some restrictions where the proceeds can be kept and how they can be used," he said.
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The contribution "Celsius is burning money but still can’t sell its mined Bitcoin" is not a financial advice.