Embattled crypto lender Celsius Network is on track to run out of money in October, according to the firm’s latest Chapter 11 filings.
Filed August 14 in the US Bankruptcy Court for the Southern District of New York, Celsius highlighted that it is expected to reach negative liquidity by October 2022 of approximately $34 million.
The lending platform, which was trusted by many around the world with life savings and retirement funds, was revealed in July in a much worse financial position than originally suggested.
Court documents revealed this week that Celsius’s three-month cash flow forecast, which shows a sharp decline in liquidity, indicates the company will experience an approximate 80% drop in liquidity pools from August to September.
The forecast predicts that Celsius will continue to report negative cash flow and, by October, will run out of money altogether. Over the next three months, the company is expected to accrue negative net cash flow of $137.2 million.
Previous court documents revealed that Celsius “operates one of the largest mining companies in the United States” and before filing for bankruptcy, had expansion plans to “mine Bitcoin by acquiring and putting into operation additional mining rigs.”
Last week many were very angry with me as I said @CelsiusNetwork it would run out of money and it was necessary to act faster on solutions. They told me I don’t understand Chapter 11. Now they confirmed they ran out of money for October. https://t.co/CyzjgKpId7 pic.twitter.com/vBIRIGEmG2
— Simon Dixon (Beware of imitators) (@SimonDixonTwitt) August 15, 2022
These findings come after Reuters reported last month that US bankruptcy judge Martin Glenn approved the struggling crypto lending platform to build a new Bitcoin mining facility using existing funds up to the amount of $3.7 million. , with an additional $1.5 million approved to be spent on “customs and duties on imported Bitcoin mining rigs.”
The document stated that Celsius mines approximately 14.2 BTC per day and owns 80,850 mining rigs, of which 43,632 were operational. Despite the alarming figures its cash flow forecast suggests, the amount of Bitcoin the company predicts it will mine each year is more promising. Having mined a total of 3,114 BTC in 2021, Celsius projected to mine over 10,100 BTC in 2022, rising steadily to 15,000 BTC in 2023.
Even though Celsius continues its mining activities, it has stopped monetizing the Bitcoin generated by filing Chapter 11 petitions, and the company is now “financially restricted.”
Celsius has not yet published a monthly account statement on its website. The most recent statement the company released on July 13 was a revelation that its “strong and experienced team” had voluntarily filed for Chapter 11. The company kept the dire news positive, reasoning that it is “to provide the company with the opportunity to stabilize your business” to “maximize value for all stakeholders”.
Reaction on social media has been mixed, with some people on Twitter staying hopeful that Celsius’ recovery plan “will be very attractive” to users and others suggesting that CEL’s price could hit $100 Some strongly believe that Celsius can recover, despite what the cash flow suggests, with an user stating that Celsius is earning $8.5 million monthly from Bitcoin, adding that Celsius will “come back stronger.”
Related: Celsius Network Coin Report Shows $2.85 Billion Balance Gap
With much speculation about the future of Celsius and potential buyers, Reuters reported last week that Ripple Labs is “interested in buying assets from the bankrupt cryptocurrency lender Celsius network.”
Cointelegraph contacted Ripple Labs for evidence on the claims. However, Ripple Labs only confirmed earlier reports, noting that the company is “interested in learning about Celsius and its assets and whether any might be relevant to our business.”
While Ripple Labs did not disclose whether it would buy Celsius, the company highlighted the fact that it “has continued to grow exponentially through a market reset and is actively seeking M&A opportunities to scale the company strategically.”
Goldman Sachs is allegedly “considering” helping an investor raise the capital required to purchase the digital assets tied to the troubled lender, according to a June 24 article.
However, one source stressed that Goldman has no intention of owning the digital assets, but rather acting on behalf of the investor as a broker.
This post Court documents reveal Celsius will run out of money in October
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