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Riches To Rags: Celsius Lost More Than $350 Million In DeFi Investment


www.thecoinrepublic.com 11 July 2022 19:30, UTC
Reading time: ~2 m

According to a research by blockchain analytics company Arkham Intelligence, Celsius lost over US$350 million while investing over US$1 billion in decentralized finance (DeFi).

High-risk leveraged crypto trading tactics

According to the investigation, the transactions caused forced liquidations totaling US$61 million and overall apparent losses of US$350 million. 

According to the data, of the more than US$1 billion used in DeFi, Celsius lost more than US$100 million to hacking.

The business put in around US$750 million to retain the holdings after the market meltdown in early June put Celsius at risk of liquidation, according to the paper, “possibly playing a crucial factor in driving them to stop withdrawals.”

At the time of this writing, Celsius is still holding two loan orders: one for USD 150 million USDC on Aave, secured by USD 606 million in crypto assets, and one for USD 85 million DAI on Compound.

According to the study, Celsius gave an asset manager who employed “high-risk leveraged crypto trading tactics” roughly 530 million dollars in corporate money.  Jason Stone, the CEO of the financial business KeyFi, was the asset manager in question, according to Arkham.

Despite owning native token CEL valued at billions of dollars, the company spent more than US$350 million buying the token from exchanges. According to the study, Celsius CEO Alex Mashinsky traded CEL tokens valued at US$45 million, often on the same markets where Celsius purchased CEL with company assets. After U.S. work hours, Celsius ignored an email requesting a response to the Arkham report.

According to documents issued on Wednesday by U.K. government executive agency Companies House, troubled cryptocurrency lender Celsius Network has reconstituted its board of directors amid bankruptcy rumors.

According to documents, Celsius named David Barse and Alan Jeffrey Carr as directors in late June.

While Carr is the founder and CEO of Drivetrain, which offers restructuring services, Barse is the founder and CEO of XOUT Capital, a company that specializes in identifying businesses that should be removed from an index. The corporation frantically spent more money to prevent these borrowing positions from liquidation when the cryptocurrency market plummeted in May-June 2022.

By July 7, Celsius had fully returned the Maker stablecoin loan of $224 million, withdrawn the whole $510 million mortgage, and handed Maker to the FTX exchange.

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