While a recently established document indicates that Celsius would be in debt twice as much as it had indicated when it filed for bankruptcy, the company nevertheless obtained the authorization of the judge in order to resell the Bitcoins (BTC) that it has itself mined.
Celsius will be able to sell its mined Bitcoin
On Tuesday August 16, the various parties involved in the Celsius bankruptcy proceedings met to discuss company operations in a context of potential restructuring.
This concerned in particular the methods of payment relating to the taxes and the expenses of the company, to its insurance costs, its debts due to its suppliers as well as its legal costs.
Also, Martin Glennthe judge in charge of the case, granted Celsius authorization to resell its mined Bitcoins (BTC) in order to to be able to honor one’s due.
However, he issued reservations about the short-term profitability of mining, given the current state of the cryptocurrency market. To this, Celsius replied that the price of Bitcoin had seen a 25% increase since the company filed its initial petition.
Note, however, that this authorization is limited exclusively to Bitcoins mined by Celsius with his own equipment. The latter remains unable to sell equity investments and will have to provide detailed information about its production and sale.
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Before declaring bankruptcy, Celsius was already mining Bitcoin in order to resell it. However, once the proceedings were initiated, the company temporarily found itself unable to resell these assets.
Thus, according to a document filed during the hearing, Celsius reportedly mined a total of 432.3 BTC in July alonebut that would not have not enough to offset the operational costs of the company. Also, although the short-term profitability of mining proves to be in deficit, the judge wanted to give the company a chance.
Celsius’s defense attorney, Ross Kwastenietexplained that the company’s mining activities only started last year and that some installations were still in progressor even that some machines were still awaiting receipt, hence its deficit in this business sector.
It also clarifies that Celsius’ mining activities constitute a ” essential activity of the company, and that the latter expects its financial situation will improve over the next few months.
Ltexas financial watchdog as well as lawyers for various creditorswho had so far opposed the sale of Celsius-mined Bitcoins, finally gave their approval in view of the various information provided, which finally seems to them to be up to par.
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Greater than expected difficulties for Celsius
While the bankruptcy filing originally filed by Celsius mentioned a deficit of $1.2 billiona new report drawn up Sunday August 14 indicates that the actual debt of the company is $2.85 billionmore than double.
According to this new document, Celsius would have a net liabilities of $6.6 billion and a total of $3.8 billion in assets under managementfigures very different from those initially announced.
In this regard, the entrepreneur Simon Dixon had posted a document on Twitter indicating a large deficit to come:
People were upset with me when I said #Celsius are missing lots of #Bitcoin & they are making up numbers with fake $CEL ratings. They confirmed they have lost 67,147 #BTC & $WBTC representing 64% of their #BTC debt. $438m of the hole is assuming they can dump all $CEL for $1 pic.twitter.com/KEQg7iu9bP
— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) August 15, 2022
The document, filed by the cabinet Kirkland & Ellisindicates that Celsius could be run out of funds by October. It could thus, according to these forecasts, deplete its treasury of $130 million once this deadline has been reached.
All the expenses put end to end, the company would then have a hole in its cash flow up to $40 million.
👉 In the news: Canadian pension fund loses nearly $200 million due to Celsius
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Source : Law360
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