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Celsius Pays Off Its Latest DeFi Loan to Recover $1 Billion



Troubled cryptocurrency platform Celsius has paid off its last major outstanding debt.

This morning, according to data from Etherscan, Celsius returned $50 million worth of DAI — MakerDAO’s dollar-indexed stablecoin — to the decentralized finance lending (DeFi) protocol Compound. In exchange, Celsius received his collateral for the loan: nearly $200 million in Wrapped Bitcoin, or WBTC.

The loan had been overcollateralized, meaning that Celsius had originally sent Compound digital assets on top of the loan to help cover potential losses. The 10,000 WBTC returned to Celsius, at the time of writing, was worth about $198 million. (WBTC is a version of BitcoinBitcoin[/definición] modified to work on the Ethereum blockchainEthereum[/definición]).

Today’s repayment marks the settlement of the last of Celsius’s major debts to decentralized finance lenders. Last month, the company received $440 million in collateral after paying off its debt to Maker. Just yesterday, Celsius also recovered some 415 million dollars after substantially reducing its debt with Aave.

Recovering so much guarantee is no small thing for Celsius. The firm came perilously close to losing these collateral liquidation deposits at various times in May and June, when falling crypto prices risked dropping them below 150% of the value of the loans they were required to cover.

It is not yet clear whether this influx of more than $1 billion in collateral for recovered debt, along with any additional liquidity the company has, will sufficiently cover Celsius’s client obligations.

Just over a month ago, the lending platform, which offered users high-yield loans of up to 18% on cryptocurrency deposits, paused all customer withdrawals, swaps, and transfers, citing liquidity issues. . He hasn’t thawed them yet.

The company was one of the first cryptocurrency platforms to freeze accounts after markets began tanking in early May, and others — Babel Finance, CoinFLEX and Voyager among them — have since followed suit.

Celsius CEO Alex Mashinsky has been silent on Twitter since late last month, when he reposted a post on the company’s blog stating that the Celsius team was “working as fast as we can to stabilize liquidity and operations.” ... offered no time frame for when customer accounts could be unfrozen.

On Sunday, a report revealed that the company had replaced lawyers hired just weeks ago to oversee the company’s restructuring process. Just yesterday, Vermont’s financial regulator called Celsius “deeply insolvent” and said previous statements by Mashinsky and other company officials about the safety of customer funds are “false.” Vermont regulators, along with those in at least five other states, are currently investigating Celsius for its decision to freeze customer accounts.

Celsius has not responded to multiple requests for comment for this article.

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