Confusion about Celsius’ financial situation

The crypto lender Celsius would still be in trouble despite the series of debt repayments in an apparent attempt to get their fingers in blocked guarantees in the US. Department of Financial Regulation (Department of Financial Regulation, The DFR) in Vermont issued a stern warning to consumers, claiming that Celsius is most likely insolvent.

Source: Adobe / Casimiro

The DFR, which said some Vermont residents were affected by Celsius’ decision earlier this summer to suspend payments, believes the company “does not have the assets and liquidity to meet its obligations to account holders and other creditors.”

DFR wrote:

“Celsius has invested its customers ‘assets in a range of risky and illiquid investments, transactions and lending activities. Celsius has amplified these risks by using customers’ assets as collateral for further borrowing to pursue leveraged investment strategies.”

The DFR added that it had joined a multi-state inquiry into Celsius because of its “concerns”.

This study may be related to another study initiated by the California Department of Financial Protection and Innovation (Department of Financial Protection and Innovation DFPI), which claims to review a number of U.S.-based crypto-lending companies.

The DFPI failed to mention the names of the companies concerned in a press release, stating only that “several” of them were interested.

The ministry wrote that these companies “may not have provided sufficient information about the risks to which customers were exposed when making cryptocurrency deposits.”

The DFPI further advised users on how to file formal complaints against mortgage lenders if they live in California, adding that it is now investigating “whether other cryptocurrency account providers did not comply with the laws” under its jurisdiction.

DFPI has already reviewed other companies’ activities in the crypto area, namely BlockFi and Travel digitally – concluded that some of the interest rate accounts offered on these platforms “were unregistered securities.”

Meanwhile, Celsius hopes to revive his hopes of solvency with a step to pay off the rest of his debt. After making a payment of USD 78.1 million in USDC (USDC) to the loan protocol Aave (AAVE), Celsius repaid the rest of its debt to Aave yesterday.

Data from Nansen show Celsius paid out $ 8.4 million USDC on July 12th. This operation released $ 26 million worth of cryptocurrencies.

Nansen’s transaction data indicates that Celsius has also transferred over $ 400 million in ether (stETH) to an unknown wallet.

In the meantime, new details have emerged about one of the other key players in the crypto-hedge fund Three arrows capital (3AC).

Yahoo Finance reported that a U.S. district court judge has ruled that 3AC cannot transfer or dispose of its U.S.-based assets while “court-appointed liquidators” investigate. At Tuesday’s hearing, Glenn Martin, a judge in the southern district of New York overseeing the company’s Chapter 15 bankruptcy proceedings, issued a ruling preventing the company from transferring or disposing of its assets in the United States, according to the report. The only U.S. assets in 3AC found so far include a legal container at the New York law firm. Dan Tan Law as well as rights under a number of different loan agreements, the report adds.

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