According to the report, Celsius Citigroup requested options for liquidity bottlenecks

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Von: Krypto News Österreich

  • Citigroup is also advised on offers, including Nexo's offer, to buy some of the assets from Celsius
  • Sudden user withdrawals reflect Mt. Gox in 2014, a crypto manager told Blockworks

After freezing user accounts on Sunday, Celsius commissioned Citigroup to advise on the next steps that she should take.

The cryptocurrency loan has brought the traditional finance bank into an advisory role, der der der Block registered on Wednesday. The Citigroup will not provide Celsius any direct funds, but will show possible financing channels, according to the report.

In addition to its advisory role, the Citigroup Celsius reports that the assessment of offers will support, including an offer by the competing lender Nexo, who officially turned to his competitor to buy some of his needy assets as Celsius signaled liquidity problems.

nexo said Blockworks that it was aware that Celsius had problems with his retirement obligations, and his results indicated the "non -sustainability" of his business, even before the lender admitted publicly.

The step of Celsius to interrupt the withdrawals and transmissions of users due to "extreme market conditions" triggered a scary sale on the cryptom market, which is reminiscent of the catastrophe of Mt. Gox Conclusion in 2014, said youwei yang, Director of Financial Analytics at Stonex. At that time, the crypto exchange based in Tokyo lost about 850,000 Bitcoin on a hack, which led to the collapse of the company.

In a Report The crypto research company Kaiko said that Celsius under a combination of bad risk management, return Market conditions and an excessive exposure to Steth (Staked Ether, a derivative of Ether that is enclosed in Ethereum Beacon) led Chain), which the company drove into a "clay-like" position.

"Even if you survive this rush, I don't see how anyone can trust that Celsius will protect his assets in the future," wrote Conor Ryder, Research Analyst at Kaiko.

Citigroup and Celsius did not react immediately to a request for the statement of block works.

The appointment of Citigroup would not be new to the crypto loan. Bank Celsius reports that the Bitcoin mining subsidiary's business has been reported to the stock exchange. In May the network A submitted Confidential S-1 registration draft for the subsidiary of the subsidiary-which is expected to be effective after the review.

views for a reorganization

Celsius also tapped the law firm Akin Gump Strauss Hauer & Feld in Washington, DC, DC, to examine potential financing options from investors, the Wall Street Journal reported

Dane Lund from Defi Alliance sees this as a step to avert potential legal proceedings for minor claims of its customers, which would impossible if the company applied for insolvency protection.

The chaos triggered by Celsius is proof that not all credit platforms are the same, according to Mauricio di Bartolomeo, co-founder of the Krypto loan ledn.

Customers are also suggested to ask the right questions in order to obtain more information about how the return paid to them is generated, he told Blockworks. "If you are not satisfied with the answers you receive, you can proactively decide to withdraw your assets or to close your loans on this specific platform," he added.

When asked how sustainable companies in the crypto loan area are, Bartolomeo said that the models that are used to generate income were very different and it would be unfair to characterize them under the same roof.

"There are considerable differences in the risk management guidelines and the reverse regeneration strategies used by the various lenders," he said.

"These lenders who have taken considerable risks [Search AS] The generation of income in Defi with the assets of their inserts, the indebted lending to borrowers with low credit quality, the received market risks with customer assets) could now be in difficulties," he added.

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The contribution "Celsius calls for Citigroup after options after liquidity bottleneck, Report Says" is not a financial advice.