fbpx
Connect with us

Bit Coin

Celsius Insolvency Rumors Swirl After Company Pauses Withdrawals, Nexo Offers to Buy Firm’s Assets

Published

on

Celsius Insolvency Rumors Swirl After Company Pauses Withdrawals, Nexo Offers to Buy Firm’s Assets

On Monday, June 13, 2022, the crypto economy dropped below the $1 trillion region, as a great majority of crypto assets have lost between 10% to 25% during the last 24 hours. Meanwhile, the crypto community has been discussing the cryptocurrency lending application Celsius as rumors of insolvency have been swirling. On June 12, around 10:10 p.m. (ET) Celsius announced that it paused “all withdrawals, swaps, and transfers between accounts.”

Celsius Pauses Lending Application’s Operations, Crypto Community Talks About a Possible Insolvency and Liquidations

On Sunday evening, the lending firm Celsius published a tweet that detailed specific operations on the platform that were paused. “Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, swaps, and transfers between accounts,” Celsius revealed.

“We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations,” Celsius added. The firm also published a blog post that explained Celsius was making moves to fix the situation.

“We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets,” the Celsius blog post notes. “Furthermore, customers will continue to accrue rewards during the pause in line with our commitment to our customers.”

There are rumors that Celsius may be insolvent and speculation concerning the company’s money issues started well before the company paused operations. The Former CEO of The Block Crypto news publication, Mike Dudas, tweeted about the “demise of Celsius” the day before the firm stopped withdrawals.

“I’m saddened by how many people are cheering on the demise of [Celsius Network],” Dudas tweeted. “I, along with many others, counseled people not to put their funds with that risky business. However, many did, and a large number of retail folks look like they are soon to be rekt. We all lose.”

However, the founder and CEO of Celsius, Alex Mashinsky, seemed to be offended by Dudas’s tweet and responded. “Mike do you know even one person who has a problem withdrawing from Celsius?” Mashinsky asked. “Why spread FUD and misinformation? If you are paid for this then let everyone know you are picking sides otherwise our job is to fight Tradfi together…”

Furthermore, there’s speculation that roughly $500 million of Celsius’ funds are locked into the Maker protocol for leverage. “Celsius Network has 17,919 WBTC leveraged in Maker protocol,” an individual on Twitter wrote. “This position faces liquidation at $22,584/$BTC. $278 mil DAI debt, making it the largest individual debt position on the protocol.”

Blockstream’s Adam Back responded to the tweet and said: “I’m assuming this is a defi BTC yield strategy. Can’t [Celsius Network] pull the DAI out of whatever yield/staking it’s in, then unwrap the DAI and get the WBTC out? Hope there’s no term-lockup on the DAI staking,” Back added.

Estimates Show Over a Billion Dollars Held in Celsius Wallets, Crypto Lender Nexo Offers to Purchase Celsius’ Assets

The Block Crypto’s vice president of research, Larry Cermak, tallied up a database of Celsius wallets and came to the conclusion that there’s $1.5 billion resting in these accounts. “Please keep in mind that there could be mistakes. The list might not be complete and I could have possibly mislabeled some over the years of tracking them,” Cermak added.

Another individual tallied up Cermak’s list and came up with roughly $1.3 billion residing on Celsius wallets. In addition to all the rumors and speculation, a Celsius competitor has offered to purchase the company’s assets. Nexo AG has submitted an open letter to the Celsius Network with a formal offer.

“After what appears to be the insolvency of [Celsius Network] and mindful of the repercussions for their retail investors [and] the crypto community, Nexo has extended a formal offer to acquire qualifying assets of [Celsius Network] after their withdrawal freeze,” Nexo explained with the letter attached to the tweet.

“[We’ve been] operating a sustainable business for 4+ years, based on solid fundamentals and prudent risk management, Nexo is in a strong liquidity and equity position as evidenced by the only real-time reserves attestation of a blockchain finance company,” the firm added.

The company concluded that obtaining all or part of Celsius’ assets “will go a long way in providing immediate liquidity to [Celsius Network].” Nexo said it is still waiting to hear back from Celsius Network’s management team concerning the formal offer.

What do you think about the situation surrounding Celsius Network? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Go to Source

Bit Coin

Record Investment Outflows of $423 Million Led to Crypto Bloodbath

Published

on

Record Investment Outflows of $423 Million Led to Crypto Bloodbath

Last week saw record outflows of $423 million from crypto assets, according to CoinShares.

The report found that the outflows last weekend were likely responsible for bitcoin’s decline to $17,760. Analyst James Butterfill said: “The outflows were solely focussed on bitcoin, which saw net outflows for the week totaling US$453m.”

BTC outflows bring down institutional investments 

Therefore, if bitcoin is removed from the calculations, Ethereum contributed an inflow of around $11 million while other alts also added minor positive flows, aggregating inflows to the extent of $70 million. 

This was Ethereum’s first inflow after 11 consecutive negative sessions according to CoinShares.

In the past week, the BTC market has slid under the $20,000 level twice. Short-bitcoin saw inflows of $15 million due to the launch of the first U.S.-based short investment product in the week in question, the report noted.

[1/5] This week’s Digital Asset Fund Flows Report is now available! Written by @jbutterfill, the headline for this week is: Record US$423m outflows last week while Short-Bitcoin saw inflows of US$15m. Read on for the highlights -> pic.twitter.com/eIalnFhacv

— CoinShares 👩‍🚀 (@CoinSharesCo) June 27, 2022

Benefits of a crypto bear market

Similar wide margins were last seen in the previous negative peak, in terms of outflows, in Jan at $198 million.

However, in relative terms, Butterfill remarked that the week did not witness the largest negative flows against total assets under management (AuM). 

“This record occurred during the bear market in Feb 2018 where outflows representing 1.6% of AuM were witnessed, while the outflows last week were the third largest on record, representing 1.2% of AuM,” the report noted.

According to FTX CEO Sam Bankman-Fried, the Federal Reserve’s decision to aggressively increase interest rates was the main reason behind the market crash.

But despite the bearish sentiments, some crypto bosses are optimistic about the results of a market downturn. Charlie Silver, founder of Permission.io told Insider: ” There are hundreds of firms that are built on hype and not substance. It will be good for the industry to have them go away.”

“Bear markets are healthy because it resets valuations to reality and flushes out the bad actors. There are many cryptos that are true Ponzi schemes, that pay investors only with new investor money. When the new money dries up the project falls apart,” Silver added.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

Go to Source

Continue Reading

Bit Coin

Uzbekistan warms up to Bitcoin mining, but there’s a catch

Published

on

Uzbekistan warms up to Bitcoin mining, but there’s a catch

The executive order spares all the mined assets from taxation and bans mining anonymous currencies.

735 Total views

6 Total shares

Uzbekistan warms up to Bitcoin mining, but there’s a catch

The National Agency of Prospective Projects (NAPP) in Uzbekistan announced its demands toward crypto mining operators. It would only allow the companies that use solar energy to mine Bitcoin (BTC) or other cryptocurrencies. 

The normative act on the government page, dated June 24, describes the confirmation of “Guidelines on the registration of the crypto assets mining,” and sets the finalization date on July 9. The second article of the document offers an uncompromising wording:

“Mining is being carried out only by the legal entity with the use of electric energy, provided by a solar photovoltaic power plant.”

As a further complication, the miners should own the solar photovoltaic power plant that they will use for energy.

The executive order also obliges any mining operator to obtain a certificate and register in the national registry of crypto mining companies. This procedure demands a brief list of documents, and should take no more than 20 days from submitting to the final decision to the licensing body. The certificates would be valid for one year after the registration.

Related: Go green or die? Bitcoin miners aim for carbon neutrality by mining near data centers

All the currency generated from mining activities would be spared taxation, though the mining farms would face the special tariffs on the consumed energy set by the Uzbekistan government. But, the trade operations with mined assets would have to be conducted only on the exchange platforms that are registered in Uzbekistan. The mining of anonymous cryptocurrencies would be prohibited.

In April 2022, the freshly-restructured NAPP became Uzbekistan’s exclusive crypto regulator with the mission to adopt a special crypto regulation regime in the country. This move came in a row of initiatives launched by the Uzbekistan President Shavkat Mirziyoyev to provide the regulatory framework for crypto. In September 2018, Mirziyoyev signed a law prohibiting local firms from launching their crypto exchanges in Uzbekistan. The law only offered legal status to crypto exchanges established by foreign legal entities.

Go to Source

Continue Reading

Bit Coin

Celsius denies allegations on Alex Mashinsky trying to flee US

Published

on

Celsius denies allegations on Alex Mashinsky trying to flee US

Celsius CEO Alex Mashinsky wasn’t trying to leave the U.S. last week but has continued to work on recovering liquidity and operations, the company has claimed.

1424 Total views

18 Total shares

Celsius denies allegations on Alex Mashinsky trying to flee US

Troubled crypto lending firm Celsius is putting their best foot forward to recover operations alongside CEO Alex Mashinsky, who currently stays in the United States, the company has claimed.

A spokesperson for Celsius has denied rumors that the company’s CEO tried to flee the U.S. last week amid the ongoing liquidity crisis of the Celsius Network.

The representative told Cointelegraph on Monday that the firm continues working on restoring liquidity, stating:

“All Celsius employees — including our CEO — are focused and hard at work in an effort to stabilize liquidity and operations. To that end, any reports that the Celsius CEO has attempted to leave the U.S. are false.”

Celsius’ statement came shortly after Mike Alfred, co-founder of the crypto analytics firm Digital Assets Data, took to Twitter on Sunday to claim that Mashinsky attempted to leave the country last week via Morristown Airport in New Jersey.

Citing an anonymous source, Alfred alleged that Celsius’s CEO was trying to go to Israel. “Unclear at this moment whether he was arrested or simply barred from leaving,” he added.

Alfred’s claims followed a massive GameStop-like “short squeeze” of Celsius, with Celsius’ native token Celsius (CEL) jumping 300% in one week by June 21. CEL price also abruptly rallied more than 600% on June 14, with analysts attributing the event to an exchange glitch or liquidation of short traders.

At the time of writing, CEL is trading at $0.741, down around 5% over the past 24 hours, according to CoinGecko. Celsius’ native token is still up more than 160% over the past 14 days.

Celsius Network token (CEL) 30-day price chart. Source: CoinGecko

Some industry observers in the crypto community have expressed skepticism about Alfred’s tweets about Mashinsky, with many considering his allegations as FUD.

If @Mashinsky attempted to leave the country this week, why are you reporting it now exactly when the CEL price is going down? Seems very coincidental Mike Alfud. And why no mainstream media or crypto media is reporting this? #CelShortSqueeze https://t.co/ynJbzWib9o

— Otis — #CelShortSqueeze ©️ ⚡️ (@otisa502) June 27, 2022

As previously reported by Cointelegraph, Celsius officially announced that it would be “pausing all withdrawals, swaps and transfers between accounts” on June 13. United States regulators subsequently started an investigation into Celsius as multiple accounts on the network were frozen.

Related: South Korean prosecutors ban Terraform Labs employees from exiting the country: Report

According to some analysts, Celsius’ liquidity issues should be attributed to shortcomings of the existing crypto lending model in general, as other lenders in the market have faced similar problems recently.

Celsius has been working hard to fix the consequences of the platform’s liquidity crisis, reportedly onboarding advisers and restructuring consultants to help the platform handle potential filing for bankruptcy. On June 18, Celsius’ lead investor BnkToTheFuture and its co-founder Simon Dixon offered to assist the network by deploying a recovery plan.

Go to Source

Continue Reading
Home | Latest News | Cryptocurrency | Bit Coin | Celsius Insolvency Rumors Swirl After Company Pauses Withdrawals, Nexo Offers to Buy Firm’s Assets
a

Market

Trending