Although Celsius’ communication has been evasive for a while, we learn that the company is getting a new law firm in order to fine-tune possible possibilities regarding its future. At the same time, the company, still struggling, has just repaid $20 million to the Aave platform.
Celsius is restructuring around a new law firm
Cryptocurrency lending platform Celsius, which has been in a fragile position for more than a month now, will restructure around a new law firm specializing in corporate consulting, according to a report from The Wall Street Journal. The possibilities mentioned included filing for bankruptcy.
The firm is therefore abandoning the law firm Akin Gump Strauss Hauer & Feld LLP, recruited in mid-June, in favor of Kirkland & Elis LLP, an international firm specializing in mergers and acquisitions, private equity and sovereign wealth funds. Kirkland & Elis LLP is also the firm that will be assisting Voyager Digital in its bankruptcy proceedings, as the company owes between $1 billion and $10 billion to its creditors.
Celsius’ last official statement was on June 30, when it said it was continuing to take significant steps to “preserve and protect assets,” including “strategic transactions,” echoing Nexo’s unanswered buyout proposal to the company last month.
At the end of June, Celsius’ previous law firm had argued for a Chapter 11 bankruptcy filing in the United States. This procedure allows companies to continue business as usual while protecting themselves when they are unable to pay their creditors.
Debt paid off bit by bit
Indebted to at least several hundred million dollars, Celsius repaid $20 million in USDC to Aave on the night of July 10-11, according to Etherscan data.
Also, according to Zapper, the various wallets identified as belonging to Celsius total more than $1.4 billion in value, with remaining debts split between Aave (more than $130 million) and Compound ($85 million).
Note that this is only a portion of Celsius’ funds, and most of the remaining funds are hosted on exchanges.
Celsius had repaid $41.2 million in IADs to Maker on Thursday, July 7, freeing up access to almost 22,000 wBTC, or $440 million at that point. Its total debt is therefore gradually decreasing, but nothing is done, especially because the confidence of its investors will probably be the most complicated thing to regain.
Let’s add that a former Celsius subcontractor recently filed a complaint against the platform, accusing it of having built a Ponzi scheme by artificially inflating the promised rates of return, in order to make up for its own mistakes.
In its recent report, Arkham Intelligence, a firm specializing in on-chain analysis, said that Celsius’ business model was based on pocketing the gap between promised returns and interest paid to the platform’s users. The report concluded:
“Celsius users’ account dashboards eventually informed them that they were accruing crypto rewards that did not actually exist.”