It’s the latest victim of the crash in crypto markets that has forced two other large companies into recent bankruptcy.
| Crypto lender Celsius Network has revealed a $1.2 billion hole in its balance sheet caused by what chief executive Alex Mashinsky calls “poor” investments and other “unanticipated” losses.
“The amount of digital assets on [Celsius’s] platform grew faster than the company was prepared to deploy. As a result, the company made what, in hindsight, proved to be certain poor asset deployment decisions,” Mr Mashinsky wrote in the filing.Celsius was one of a handful of crypto lenders that pulled in billions of dollars worth of assets from ordinary investors in recent years. It promised interest rates as high as 18 per cent on certain cryptocurrencies.
One was a $US510 million loss discovered in 2021 when Celsius sought to recover collateral it had pledged to cover borrowings from an unnamed “private lending platform”.“The lender was unable to return the ... collateral on a timely basis,” Mr Mashinsky wrote. About $US440 million of that remains outstanding, he added.
He suggested Celsius’ recovery plan could involve using bitcoin generated from its mining operations to “address its current cryptocurrency deficit”.
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