Crypto lender Celsius mulls possible restructuring amid financial woes - page 9.

PrimeNumber7

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Quote from: o_e_l_e_o on July 16, 2022, 01:22:54 AM

Quote from: PrimeNumber7 on July 15, 2022, 05:20:06 AM

I really don't see many people depositing more money into Celsius, nor becoming a customer in the near future. I honestly don't think PR should be a concern right now.

I highlighted a quote from Mashinsky in another thread here: https://bitcointalksearch.org/topic/m.60564757. Absolutely ridiculous that with millions of people losing huge amounts of money, he is more concerned about the optics of his company.

I'd be interested to see what Mashinsky does next after he likely loses his job after Celsius likely either goes out of business or is sold.

Celsius currently has negative equity to the tune of at least a billion dollars (according to their numbers). This is almost certainly going to result in losses for their customers.

Quote from: o_e_l_e_o on July 16, 2022, 01:22:54 AM

Quote from: PrimeNumber7 on July 15, 2022, 10:34:26 AM

There is the potential that some of the numbers are missing some context, or are based on faulty assumptions, but I don't think they are being intentionally misrepresented.

I would agree. I don't think they are intentionally wrong, rather just another indication of Celsius' amateurish behavior.

I think the mining loan is probably more of an example of Celsius engaging in risky behavior. Miners are not trivial to liquidate, especially in large numbers, and mining is an inherently risky proposition.

The more details about Celsius' business practices in recent time, the lower opinion I have about their management.

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Seems I always get to read this latest news a bit late, thought they were actually getting themselves out of trouble (also because they didn't file for bankruptcy earlier). Think stompix's right. This way, they do backdoor agreements with the powerful guys they owe money to, pay most of all of it of, then get the law to protect them while they pay whatever's left to the retail cake eaters.

To anyone else having money with other lenders, might want to take out all you can before their own insolvencies come to light (and I bet they're all just hiding as best they can hoping for crypto markets to save their ass).

o_e_l_e_o

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Quote from: PrimeNumber7 on July 15, 2022, 05:20:06 AM

I really don't see many people depositing more money into Celsius, nor becoming a customer in the near future. I honestly don't think PR should be a concern right now.

I highlighted a quote from Mashinsky in another thread here: https://bitcointalksearch.org/topic/m.60564757. Absolutely ridiculous that with millions of people losing huge amounts of money, he is more concerned about the optics of his company.

Quote from: stompix on July 15, 2022, 09:00:52 AM

There is something really fishy there, from the loan which Celsius Mining took from Celsius Loaning to those numbers.

Yes, exactly. They are pricing their "mining assets" based on the initial cost, and leaving out the fact that if they actually tried to sell these second hand out of date ASICs they would only be worth a fraction of what was originally paid for them.

Quote from: PrimeNumber7 on July 15, 2022, 10:34:26 AM

There is the potential that some of the numbers are missing some context, or are based on faulty assumptions, but I don't think they are being intentionally misrepresented.

I would agree. I don't think they are intentionally wrong, rather just another indication of Celsius' amateurish behavior.

PrimeNumber7

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Quote from: stompix on July 15, 2022, 09:00:52 AM

Quote from: o_e_l_e_o on July 15, 2022, 03:13:32 AM

According to this article (https://www.theblock.co/post/157647/celsius-bankruptcy-documents-claim-1-2-billion-balance-sheet-gap), Celsius have said that their mining operations will be used to pay off their deficits. Apparently they mine ~14 BTC a day. At current prices and hashrates, they would only be able to mine a little over half of that $1.2 billion before the block subsidy disappears in ~120 years.

There is something really fishy there, from the loan which Celsius Mining took from Celsius Loaning to those numbers.
<>
Of course, they could have other miners on other algorithms but the numbers are still inflated, I would say at least by half.

I would say with near certainty that the numbers in the bankruptcy filing are not intentionally inflated. Celsius has no reason to inflate these numbers. No sane person is going to deposit additional coin onto their platform, including coin for collateral for a loan. The bankruptcy filing will put all litigation on hold (prevent litigation from being filed/initiated), and any actual values will eventually come out, if the values are misrepresented.

There is the potential that some of the numbers are missing some context, or are based on faulty assumptions, but I don't think they are being intentionally misrepresented.

uneng

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If Mashinsky faked assets' numbers it's going to get worse for him yet... He made it through an official document attached to the bankruptcy proceedings.

Quote from: Rikafip on July 15, 2022, 09:19:46 AM

Wait, they are still paying weekly dividends with the same rates? Crazy...

Yes, every monday I receive a notification from them. Tongue

It really makes no sense for a company which is theoretically trying to recover itself from a huge debt, unless they had to file bankruptcy first, before stopping paying dividends.

Rikafip

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Quote from: stompix on July 14, 2022, 04:06:13 PM

This is really bad, really bad PR. Imagine bragging how crypto is better than gold, how you try to invest your crypto holding only to find out the company you blended money with was buying gold with it, this will definitely piss a lot of users, and I can understand why.

Judging by the people I know that have money in Celsius, I don't think that significant amount of users will be upset over that. People I know that have money there are only in crypto to make more fiat, they don't really care about anything else. They would gladly put their money into whatever they think will bring them more money at the end of the day, so who cares whether its gold, stocks or something else. Well, at least that's the profile of people I know that have money there.

Quote from: uneng on July 14, 2022, 04:52:40 PM

They just need to stop increasing debt, that is, they should stop paying weekly dividends to investors.

Wait, they are still paying weekly dividends with the same rates? Crazy...

stompix

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Quote from: o_e_l_e_o on July 15, 2022, 03:13:32 AM

I don't believe those numbers of a second. The entire marketcap of CEL is $178 million, yet they claim to have $600 million in CEL tokens?

That's another of the headaches people are going to have when trying to solve this mess.
Different sites list different circulating supplies, the best explanation I found on coigecko,

Total
692,753,441
Cel Treasury (0xce60) - 155,156,600
Celsius - Team (0xB2D9) - 9,266,369
Loan Collateral (0x81b5) - 117,000,000
Est. Circulating Supply 423,415,980

Still doesn't make 600 million

Quote from: o_e_l_e_o on July 15, 2022, 03:13:32 AM

According to this article (https://www.theblock.co/post/157647/celsius-bankruptcy-documents-claim-1-2-billion-balance-sheet-gap), Celsius have said that their mining operations will be used to pay off their deficits. Apparently they mine ~14 BTC a day. At current prices and hashrates, they would only be able to mine a little over half of that $1.2 billion before the block subsidy disappears in ~120 years.

There is something really fishy there, from the loan which Celsius Mining took from Celsius Loaning to those numbers.
If they mine 14 BTC a day, you have 1.5% of the hashrate, it means around 3Exa, and it would nearly match the 22 000 Asics they claimed to have operational before. But, they claim 700 million in mining assets, and there is no way in hell 22 000 S19 would be worth now more than 100 million. So that is paid in advance gear!

Quote from: uneng on July 14, 2022, 04:52:40 PM

Quote from: stompix on July 14, 2022, 04:06:13 PM

~

Regards the mining business, what is more interesting at this point, to keep running the mining operations or to sell the farm to raise funds faster, taking advantage of the low price of bitcoin, so they can hold for the next bull run?

It's tricky, in the US you can claim depreciation for miners, the price has already gone down, I don't think there are buyers anymore, and when will that bullrun even come? Besides, if a bull run comes the price of gear goes up like that again, an S9 was selling for $60 during the bull run it reached $800-$1000, people went crazy. No, without a clear report on everything, how long contracts for rent electricity, rates, there is no easy answer.

PrimeNumber7

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Quote from: o_e_l_e_o on July 04, 2022, 04:01:50 AM

Quote from: PrimeNumber7 on July 03, 2022, 05:16:41 PM

This makes me tend to believe this is more of an issue of Celsius being a failed bank, and not them putting customer money in exotic "investments".

Do we know if Celsius's loan to 3AC, which was the catalyst for their collapse, was over collateralized, under collateralized, or not collateralized at all?

I am not sure.

Quote from: o_e_l_e_o on July 04, 2022, 04:01:50 AM

Quote from: PrimeNumber7 on July 03, 2022, 05:16:41 PM

My guess is that any solution is going to involve money being injected from a third party, either in the form of debt or in the form of someone buying (part of) Celsius, unless they end up not being able to honor all deposits in full.

I think its a given right now that they will not be honoring all user deposits in full. With entities such as Goldman Sachs preparing to scoop up their assets at a huge discount, Celsius will not have enough money to pay all their secured depositors, let alone their users who are unsecured deposits and are last on the list to receive any compensation.

It does appear that Celcius has insufficient funds to honor all deposit holders in full. It is not clear why they have less assets than liabilities, although I think it is likely because of a (series of) bad loan(s) they have already written off. Perhaps the loan to 3AC was not sufficiently collateralized as of when the loan was written down and/or other loans were in a similar position.

Quote from: stompix on July 14, 2022, 04:06:13 PM

Quote from: uneng on July 14, 2022, 01:18:12 PM

For those who might interest, an investor who is also a lawyer points some observations regard the currently situation at reddit:
https://www.reddit.com/r/CelsiusNetwork/comments/vyw8et/bankruptcy_filings_are_answering_some_questions/

Well, he updated it with some good news :
<>

Quote

3. One of the filings requires a detailed description of the accounting and bank system used by Celsius. You can view the PDF here. Of note, Celsius has a lot of accounts. Some of which, somewhat surprisingly, "fund Celsius investments in gold futures, among other things."

This is really bad, really bad PR.
<>

Quote from: TryNinja on July 13, 2022, 07:34:03 PM

Of course their blog post has a lot of lawyer-picked words to spin this as something good for the company.

I really don't see many people depositing more money into Celsius, nor becoming a customer in the near future. I honestly don't think PR should be a concern right now.

Quote from: stompix on July 13, 2022, 07:53:32 PM

In the thousand of tweets that were praising Celsius for paying back the land, I've read one that anticipated it..

Quote

They're paying down their loan obligations with customer funds. Once they've cleared the defi debt, they will go to Bankruptcy court. Depositors are hosed. Will be lucky to get 20c on the $ returned.

You generally cannot pay a debt shortly before filing for bankruptcy, and these payments may be reversed by the bankruptcy court if they actually occurred. If collateral held by a third party that secured a loan was liquidated by the lender, that may be a different story.

Quote from: stompix on July 14, 2022, 09:38:21 AM

Quote

Adam Levitin, Georgetown law professor and principal at Gordian Crypto Advisors, said Celsius customers may have to wait years to see their money again and may only be entitled to pennies on the dollar. Customers that took part in Celsius’s high-yield deposit program could be seen as unsecured creditors in the eyes of the court. “The treatment here seems to be that the customer’s crypto is actually the company’s property, and as an unsecured creditor, you don’t get your bitcoins back,” Levitin told CNBC, adding that he doesn’t think Celsius is the last of the crypto bankruptcies.

Again, I must admit that I have very little knowledge on how this thing will play, especially since there is already a controversy on what those funds were, and how they should be treated but my opinion is that everyone should write this as a loss and let it be if something good comes out it will be a nice surprise, if no, that's it.

There are a lot of things that will affect the percentage of their deposits that deposit holders get bac, but I think it is most likely that it will be a long time before customers have their money returned.

o_e_l_e_o

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Quote from: uneng on July 14, 2022, 04:52:40 PM

Does it mean they still have 4,31$ billion dollars in assets?

I don't believe those numbers of a second. The entire marketcap of CEL is $178 million, yet they claim to have $600 million in CEL tokens? And with a daily volume of $30 million, they would dump the price to nothing trying to offload even a fraction of those tokens. Given that they can't accurately price their own token, what's the chances that they have accurately priced their other cryptoassets? And things like mining assets (ASICs) only go down in value as time goes on.

And even if you believe all that, they still have a deficit of $1.2 billion. According to this article, Celsius have said that their mining operations will be used to pay off their deficits. Apparently they mine ~14 BTC a day. At current prices and hashrates, they would only be able to mine a little over half of that $1.2 billion before the block subsidy disappears in ~120 years. And never mind that they would have to continually spend more money to keep up their proportion of the hashrate as their current mining hardware becomes outdated. Essentially they are saying "If there's a huge bullrun we might break even again." Absolute pie in the sky thinking.

uneng

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Quote from: stompix on July 14, 2022, 04:06:13 PM

Celsius claimed to have 22 000 ASICS, since we know they have S19, and we can from here go and think of 6 cents per kwh including other costs at maximum, so one part of their operation, Celsius Mining LLC should still be profitable, we're talking about $3 million a month, of course, peanuts compared to the 1.1 billion but there is still chance for that to survive, plus about at least $100 million in assets here.

One more piece of bad news, $600 million in assets are CEL tokens, this might be just another 600 million hole.

Does it mean they still have 4,31$ billion dollars in assets? If so, and if those informations are legit, it's not terrible, because they still maintain more than 75% of users' funds and could potentially recover totally in few years through lending without major risks. They just need to stop increasing debt, that is, they should stop paying weekly dividends to investors.

Regards the mining business, what is more interesting at this point, to keep running the mining operations or to sell the farm to raise funds faster, taking advantage of the low price of bitcoin, so they can hold for the next bull run?

stompix

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Quote from: uneng on July 14, 2022, 01:18:12 PM

For those who might interest, an investor who is also a lawyer points some observations regard the currently situation at reddit:
https://www.reddit.com/r/CelsiusNetwork/comments/vyw8et/bankruptcy_filings_are_answering_some_questions/

Well, he updated it with some good news :

Quote

3PM Update: We have the declaration of Alex Mashinsky filed and while there's a lot to get through, this is more good news than bad. The $2 billion dollar hole is actually just a $1.1 to 1.4 billion dollar hole.

but two of those points are seriously bad, and one of them is almost an insult

Quote

While I think we all knew the 1.7m user number was bunk, the filing reveals that there are about 300,000 active users with more than $100.

What a surprise, inflating the numbers with x5, probably the sector standard practice.

Quote

3. One of the filings requires a detailed description of the accounting and bank system used by Celsius. You can view the PDF here. Of note, Celsius has a lot of accounts. Some of which, somewhat surprisingly, "fund Celsius investments in gold futures, among other things."

This is really bad, really bad PR. Imagine bragging how crypto is better than gold, how you try to invest your crypto holding only to find out the company you blended money with was buying gold with it, this will definitely piss a lot of users, and I can understand why.

Quote

It is highly imprecise, but Celsius discusses it's monthly cash needs to cover employees, operations, and all of its subsidiaries is about $3 million per month. The filings also speak to a great deal of ongoing construction, maintenance, and incoming rig shipments at the mining facilities.

Celsius claimed to have 22 000 ASICS, since we know they have S19, and we can from here go and think of 6 cents per kwh including other costs at maximum, so one part of their operation, Celsius Mining LLC should still be profitable, we're talking about $3 million a month, of course, peanuts compared to the 1.1 billion but there is still chance for that to survive, plus about at least $100 million in assets here.

One more piece of bad news, $600 million in assets are CEL tokens, this might be just another 600 million hole.

uneng

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Quote from: TryNinja on July 14, 2022, 12:10:11 AM

Customers are definitely screwed. Looks like they want to keep getting paid and the regular Joe will most likely be the last one to get anything (at all).

They have no respect or consideration for average users. It is very clear on their last tweet, when they made sure to differentiate stakeholders from the rest of the community.
It couldn't be different anyway, since they were gambling with customers' funds while telling them everything was under control and the risks were low.

For those who might interest, an investor who is also a lawyer points some observations regard the currently situation at reddit:
https://www.reddit.com/r/CelsiusNetwork/comments/vyw8et/bankruptcy_filings_are_answering_some_questions/

Rikafip

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Quote from: stompix on July 14, 2022, 09:38:21 AM

As much as I want those CEX and those wannabes new bank order guys to be reached a reality lesson, the pain inflicted on the users that trusted them with money is making me cheer for them not to crash, or if some do at least make it a crash every three months, not ten in one.

Same here. I do wish people stop using those platforms and that they somehow disappear, but I have couple of close friends that have (had?) serious amount of money in Celsius so I really hope that it survive in some shape or form.

Biggest issue is that people didn't see this as a high risk at all (big reason for that is that Celsius never disclosed what they are actually doing with people's money in order to get those percentages) and instead they treated it like its the real bank (despite everything, immensely more secure than an average "DeFi" platform) and were putting their life savings into it.

stompix

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Quote from: TryNinja on July 14, 2022, 12:10:11 AM

Were they actually paying unsecured loans, tho? All I know is that they have been going around all DeFi paying out overcollateralized loans, which is an absolutely no-brainer as the collateral is always worth more.

Well, both you and me, we "know" this because that's what Celsius says. I might be biased in this but that news come from the same guy who said
https://twitter.com/Mashinsky/status/1535767334668861440

Quote from: TryNinja on July 14, 2022, 12:10:11 AM

Customers are definitely screwed. Looks like they want to keep getting paid and the regular Joe will most likely be the last one to get anything (at all).

Probably it's going to be pennies to ~~the dollar~~ a bitcoin.

Quote from: Rikafip on July 14, 2022, 06:02:07 AM

Speaking of crypto.com, this is the message I saw yesterday in one private Telegram group that is usually not bullshiting: "Fair warning rumors have it crypto.com is going bankrupt do with this information what you will but if have funds on it I seriously consider moving them....". I have no idea whether its just some fud like with Kucoin recently, but one can't be too careful after everything that has happened in the last month or so.

If crypto.com goes down, that will be a lot more pain to a lot of small users who have a lot compared to their savings on that platform.
As much as I want those CEX and those wannabes new bank order guys to be taught a reality lesson, the pain inflicted on the users that trusted them with money is making me cheer for them not to crash, or if some do at least make it a crash every three months, not ten in one.

le:fixed typo

Rikafip

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Quote from: dkbit98 on July 14, 2022, 05:48:29 AM

I would also watch out for any services that use shitcoin tokens like CEL for Celsius, CRO for Crypto.com, or any lending platforms and centralized exchanges.

Speaking of crypto.com, this is the message I saw yesterday in one private Telegram group that is usually not bullshiting: "Fair warning rumors have it crypto.com is going bankrupt do with this information what you will but if have funds on it I seriously consider moving them....". I have no idea whether its just some fud like with Kucoin recently, but one can't be too careful after everything that has happened in the last month or so.

dkbit98

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Quote from: TryNinja on July 13, 2022, 07:34:03 PM

They are officially filling for bankruptcy chapter 11 in NY

If this is not a scam than I don't know what is, but I expected this bankruptcy to happen with Celsius.
Some people are saying this is going to be like MtGox all over again, but I think this won't stop here because Blockchain.com could face similar destiny from news I saw few days ago.
I would also watch out for any services that use shitcoin tokens like CEL for Celsius, CRO for Crypto.com, or any lending platforms and centralized exchanges.
Watch out what FTX owner Sam Bankman-Fried and Alameda Research is doing during this time, bailing out Voyager, BlockFi...

TryNinja

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Quote from: stompix on July 13, 2022, 07:53:32 PM

I was against this scenario, it wasn't making any sense, why would they pay loans and then fill for bankruptcy, although this is 11, not 7, but now that I think more about it the customer will get screwed while the ones that loaned money to Celsius got their funds back before the filling and won't have to sit at the table sharing what's left of the already eaten cake..
Or at least this is what I can make now of the situation!

Were they actually paying unsecured loans, tho? All I know is that they have been going around all DeFi paying out overcollateralized loans, which is an absolutely no-brainer as the collateral is always worth more. They pay $1m in USDC they borrowed to free up $1.5m in BTC collat, for example.

Customers are definitely screwed. Looks like they want to keep getting paid and the regular Joe will most likely be the last one to get anything (at all).

stompix

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In the thousand of tweets that were praising Celsius for paying back the land, I've read one that anticipated it..

Quote

They're paying down their loan obligations with customer funds. Once they've cleared the defi debt, they will go to Bankruptcy court. Depositors are hosed. Will be lucky to get 20c on the $ returned.

I was against this scenario, it wasn't making any sense, why would they pay loans and then fill for bankruptcy, although this is 11, not 7, but now that I think more about it the customer will get screwed while the ones that loaned money to Celsius got their funds back before the filling and won't have to sit at the table sharing what's left of the already eaten cake..
Or at least this is what I can make now of the situation!

TryNinja

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Well, not good news. Tongue

They are officially filling for bankruptcy chapter 11 in NY: https://twitter.com/celsiusnetwork/status/1547375324622618624

Of course their blog post has a lot of lawyer-picked words to spin this as something good for the company.

o_e_l_e_o

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Quote from: dkbit98 on July 09, 2022, 06:51:39 AM

You know they are often times masquerading as decentralized services that support DeFi, so most people believe they are really working like that and they still own their coins Tongue

People don't understand what decentralized means, and various exchanges capitalize on this fact and call themselves decentralized as a marketing gimmick when in reality they are no such thing. My favorite example is IDEX. Call themselves decentralized, even have the word "DEX" in their name, and yet demand KYC from their users. Roll Eyes

Quote from: dkbit98 on July 09, 2022, 06:51:39 AM

https://celsius.network/

Well, there is some truth in that. It was always very transparent from their ridiculous interest rates that they were gambling away your money on risky loans and investments, and now it is very transparent that everyone who blindly trusted them has lost all their coins. Tongue

Topic: Crypto lender Celsius mulls possible restructuring amid financial woes - page 9. (Read 3087 times)