The news this week is marked by the insolvency of FTX and the refusal of Binance to come to its aid. In the aftermath, the company announced bankruptcy and the industry took a nosedive. This economic situation is a warning to be taken seriously by other projects such as Celsius, which could experience the same fate, ceteris paribus. Indeed, the struggling crypto lender has made mention of exposure to the FTX exchange as well as Alameda Research. Celsius reportedly filed for Chapter 11 bankruptcy protection last Friday, citing an interest in transparency.
Tension rises for Celsius who fears the worst
The financial collapse observed in Celsius since March has not resulted in a positive balance. Indeed, since the beginning of the year the company has experienced significant falls in the recorded stock of assets. Passed from more than 22 billion of assets to 17 billion, the company records a significant debt with the 100,000 creditors registered in its registers. In order to maintain transparency, Celsius recently stated that it has 3.5 million tokens in Serum on FTX. The same statement also stipulated a loan of 13 million to Alameda Research.
This situation is uncomfortable for Celsius’ customers and creditors. It portends bankruptcy for the company, like FTX if nothing changes. FTX with a view to collaborating with Celsius had signed an agreement. In view of the critical state of Celsius’s finances, FTX has withdrawn from the agreement established upstream with Celsius. The same scenario happened five months later with Binance and FTX.
the chapter 11 of the bankruptcy law was summoned by the company as an emergency exit. This strategy recommended to Celsius by FTX and Alameda Research allows the company not to sink, but to restructure itself. Alameda holding liquidities which vary between 10 and 50 billion dollars in assets and liabilities, intends to rescue Celsius. This is a bargain that FTX would have liked to enjoy from Binance.
Conclusion
Unlike the relationship between FTX and Binance, Celsius could find with Alameda a way out of the crisis to revive. Thanks to Chapter 11 bankruptcy law, the company might not follow in FTX’s footsteps.
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