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Celsius Network, a cryptocurrency lending firm with headquarters in Hoboken, New Jersey declared $75 million to be the total loan it is owed by the distressed hedge fund, Three Arrows Capital (3AC). Altogether, the hedge fund owes about 30 companies the sum of $3.5 billion.
The distressed cryptocurrency hedge fund had recently slipped into liquidation following an order from a British Virgin Island court. This was partly due to the fall in the price of Bitcoin (BTC) and other digital assets. Many digital coins lost their footings and fell below speculations which in turn led to massive sell-offs across the markets.
3AC later declared a state of insolvency and employed Teneo Restructuring to take charge of its liquidation process. The restructuring firm started by first collating the assets after which customers would be informed of the guidelines to follow to lay claims on their assets.
At this time, Celsius came into the picture to redeem the hedge fund and gave the first loan of $50 million to 3AC. The loans were given in the United States pegged dollar stablecoin USDC. Shortly after, Celsius had to part with USDC worth $25 million to loan 3AC, increasing its debt to $75 million worth of stablecoin.
Celsius Files for Chapter 11 Bankruptcy
Recounting that Celsius had to suspend withdrawal and other trade on its platform a few weeks ago. Its swap and transfer products were also put on hold as reported by TheCoinRise. This became pertinent after Celsius noticed a flow of massive withdrawal from its platform.
Celsius was owing its users about $4.7 billion in crypto. Therefore, to give the crypto lender ample time and support to restructure, Celsius filed for Chapter 11 bankruptcy in the United States court. This led to liquidation which was valued at $167 million.
Presently, Celsius has sent a notice of termination to the hedge fund and has received an affidavit through Kyle Davies, co-founder at 3AC. In the notice of termination, Celsius said that 3AC did not submit the additional required collateral which was demanded. Also, 3AC is yet to make the required payments.
The post Celsius Network Borrowed Three Arrows Capital $75M appeared first on Blockchain, Crypto and Stock News.
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