Celsius Network Injected $40M into Mining 2 Weeks After Going Bankrupt

It has been gathered that bankrupt crypto firm Celsius Network has plunged up to $40 million into its startup Bitcoin (BTC) mining operations. 

This investment into mining had taken place exactly two weeks after the crypto lending giant filed for bankruptcy in a United States Bankruptcy Court. Chris Ferraro, the Chief Financial Officer at Celsius Network made the announcement during a Friday meeting with creditors.

According to the announcement, Celsius delved into the mining operation with the purpose of making a profit on or before January. 

Shara Cornell from the Office of the U.S. Trustee, a Justice Department watchdog overseeing the bankruptcy courts approached Ferraro for an explanation. In response, Ferraro mentioned that the $40 million was used to cover the cost of electric utility bills generated by the mining rigs.

Crypto lending firm Celsius Network ended the second quarter of the year by suspending withdrawals on its platform. In addition, its swap and transfer products were also affected. All of these were attributed to the prevalent extreme market conditions. Amid the withdrawal suspension, the price of the Celsius native token CEL plummeted by over 50%.

Several firms started making plans to acquire the crypto lender, amongst which were Sam Bankman-Fried FTX, Nexos, and Ripple Labs. After much consideration, Celsius opted to file an application to the Southern District of New York Bankruptcy Court. The crypto lender decided on this bearing restructuring plans in mind and seeking a way to refund creditors and customers’ funds.

Celsius Believes BTC Mining is a More Productive Venture

At this time, it was declared that Celsius had $167 million in liquidated cash. The crypto firm planned to utilize the fund for financial needs which may arise during its restructuring process. Meanwhile, in the financial reports released last week, it was discovered that Celsius had only $129 million in cash.

With this cash at hand, it was speculated by the lawyer representing Celsius Network, that the lending giant will not run out of cash until October. The crypto lender has said this bearing the BTC mining operations in mind.

Coming from Ferraro, it was noted that “Celsius trusts in spending cash on its mining operations rather than selling the mining assets to generate cash for the estate.”

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