In a presentation on Monday, embattled crypto lender Celsius Network presented a plan of action as it enters Chapter 11 proceedings to restructure and stabilize its business in an effort to placate stakeholders.
See related article: Celsius says it owes its users US$4.72B amid a US$1.19B balance sheet deficit
Fast facts
- The firm expects to use minted Bitcoins from its mining subsidiary to boost its balance sheet and fund mining operations, the presentation said.
- At the bankruptcy hearing, Pat Nash, Celsius’ lead attorney, said the firm’s mining division currently mints 14.2 Bitcoins a day and expects to increase operations to mine 10,100 Bitcoins in 2022.
- Even if Celsius mints 10,100 Bitcoins, at a price of US$21,900, the minted Bitcoins will be valued at more than US$221 million — far below Celsius’ deficit of US$1.19 billion. A sale of the mining unit would also help Celsius raise money.
- In the presentation, Celsius added that it is also exploring “asset sales and third-party investment opportunities” to meet its liabilities.
- According to the bankruptcy filings, Celsius has assets worth US$4.3 billion, although most assets are illiquid, and liabilities amounting to US$5.5 billion, out of which US$4.7 billion are user liabilities.
- Celsius customers could either choose to receive a discounted cash settlement or remain “long” on crypto, the presentation said.
- But with Nash arguing in court that Celsius customers handed over custody of digital assets to the lender and are, therefore, unsecured creditors, Celsius users may have to face the brunt of its collapse.
See related article: Celsius files for bankruptcy after closing DeFi loans