The market was rocked again in June, due to the groundbreaking announcement by crypto lending platform Celsius. The company announced that it will no longer allow users to withdraw, swap or transfer account balances. The altcoin project is now paying off debts to DeFi loan protocols that have paid 20 million USDC to Aave.
Celsius changes legal team: Critical move towards altcoin project
Crypto lending platform Celsius is seeking help from Kirkland & Ellis LLP to resolve bankruptcy. Last week, we heard that Kirkland & Ellis LLP, the same firm that helped Voyager Digital, had hired lawyers to seek advice on restructuring options. The company has hired lawyers to advise on options, including filing for bankruptcy, to replace previously hired law firm Akin Gump Strauss Hauer & Feld LLP, according to a report by the Wall Street Journal on Sunday.
Kirkland & Ellis LLP is a law firm serving clients in private equity, M&A and other corporate transactions. The law firm was also the general bankruptcy counsel for Voyager Digital in bankruptcy proceedings. He filed in the Southern District Court of New York on July 5, days after he paused his withdrawals.
Celsius pays $20 million in debts to Aave
It paid off some of its debts to Aave, despite lingering concerns that Celsius might follow a similar path. The lending platform on the verge of bankruptcy continued to reduce its debts by paying 20 million USD in Coins (USDC). Blockchain analytics firm Peckshield shared its latest loan repayment Sunday. On this date, Peckshield provided a screenshot of the transfer of 20 million USDC from Celsius wallet to Aave Protocol v2.
#PeckShieldAlert Celsius (0x8ace…130ee8) has repaid 20m $USDC on Aave pic.twitter.com/U7h1Lvyy5x
— PeckShieldAlert (@PeckShieldAlert) July 11, 2022
DeFi monitoring platform Zapper shows Celsius still owes Aave a total of $215 million. cryptocoin.comAs we have quoted, these debts include the following altcoin amounts.
- $130 million USDC.
- $82,500 in ren (REN)
- $85.2 million Dai (DAI) debt to the Compound protocol.
- Thus, a total of 215 million dollars.
Last week, the Celsius platform paid off its remaining debt. It paid $41.2 million in debt to Maker protocol on Thursday. With this debt, more than $500 million was freed in Wrapped Bitcoin (wBTC) collateral.
What do these mean for the altcoin project?
All in all, the settlement was positive for Celsius’s depositors, who have been unable to access their crypto funds since withdrawals stopped on June 13 and fear their funds will be lost if the company goes bankrupt. Last week, crypto lawyer Joni Pirovich said that Celsius’s repayment of its loan position will ultimately help its clients. This is because it frees up capital that customers will use to meet their withdrawal requests.
Pirovich adds that even if Celsius files for bankruptcy, repaying its loan position and withdrawing collateral will improve the situation for its clients.
