The struggling cryptocurrency lender, Celsius Network, is on track to run out of money in October, according to the company’s latest Chapter 11 filings.
Filed Sunday in the United States Bankruptcy Court for the Southern District of New York, Celsius highlighted that it expects to reach negative liquidity of approximately USD 34 million by mid-October 2022.
The lending platform, trusted by many who deposited their life savings and retirement funds, turned out to be in a much worse financial position than originally suggested in July.
Court documents revealed this week that Celsius’s three-month earnings forecast, which shows a steep decline in liquidity, indicates the company will experience an approximate 80% decline in liquidity pools in the August-September window. .
The forecast shows that Celsius will continue to post negative revenue and come October completely out of money. In the next three months, the company is expected to post negative revenue of $137.2 million.
Earlier court documents revealed that Celsius “operates one of the largest cryptocurrency mining companies in the United States” and that, before filing for bankruptcy, it had expansion plans for “mine Bitcoin by acquiring and activating additional mining equipment.”
Last week many got very upset with me as I said @CelsiusNetwork would run out of money & solutions needed to be acted upon faster. I was told I don’t understand Chapter 11. They have now confirmed they run out of money by October. https://t.co/CyzjgKpId7 pic.twitter.com/vBIRIGEmG2
— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) August 15, 2022
These findings come after Reuters reported last month that The cryptocurrency lending platform received approval from United States Bankruptcy Judge Martin Glenn to build a new Bitcoin mining facility using existing funds up to the amount of $3.7 million, with an additional $1.5 million approved to be spent on “customs and duties on imported Bitcoin mining equipment.”
The document claimed that Celsius is mining approximately 14.2 BTC per day, and that it owns 80,850 mining rigs, of which 43,632 are operational. Despite the alarming figures its revenue forecast suggests, the amount of Bitcoin the company predicts it will mine each year is more promising. Having mined a total of 3,114 BTC in 2021, Celsius projects to mine more than 10,100 BTC in 2022, with a steady increase to 15,000 BTC in 2023.
Despite the fact that Celsius continues with its mining activities, it has stopped monetizing the generated bitcoins by filing its Chapter 11with the company now “financially limited”.
Celsius has not yet posted a monthly statement on its website. The most recent statement the company released on July 13 was a revelation that its “strong and experienced team” had voluntarily filed for Chapter 11. The company kept the dire news positive, reasoning that it is “to provide the company with an opportunity to stabilize its business” and “maximize value for all stakeholders.”
Reaction on social media has been mixed, with some people on Twitter holding hopeful that Celsius’ recovery plan “will be very attractive” to users and others who suggest that the price of Celsius (CEL) could reach $100. Some strongly believe that Celsius can recover, despite what its revenue estimates suggest, with a user claiming that Celsius is winning $8.5 million monthly Bitcoin, adding that Celsius will “come back stronger.”
With many speculating about the future of Celsius and potential buyers, Reuters reported last week that Ripple Labs is “interested in potentially buying the assets of Celsius Network.”
Cointelegraph contacted Ripple Labs for evidence on the claims. Nevertheless, Ripple Labs only confirmed the above news, noting that the company is “interested in learning about Celsius and its assets and if any might be relevant to its business.”
Although Ripple Labs has not revealed whether it will buy Celsius, the company has highlighted that “has continued to grow exponentially through a market reset and is actively seeking M&A opportunities to scale strategically.”
According to a June 24 article, Goldman Sachs is reportedly “considering” helping an investor raise the necessary capital to purchase the digital assets tied to the distressed lender.
However, one source highlighted that Goldman does not intend to own the digital assets, but rather to act on behalf of the investor as an intermediary.
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