Celsius Network, a crypto lender that is going through bankruptcy, stated that it expects to be able to keep operating through the end of 2022 thanks to a recently found $70 million cash stash.
The law firm that was hired by Celsius to provide assistance for restructuring process, Kirkland & Ellis, wrote in a document that the crypto lender anticipates “approximately $70 million of proceeds from the repayment of USD denominated loans.”
A Kirkland & Ellis attorney claimed during a hearing in the U.S. Bankruptcy Court that the loans were misunderstood to be in dollar-pegged stablecoins, which would be impossible for the lender to use it to fund its operations.
The additional funds provide Celsius with a much-needed boost in its limited liquidity and will increase its runway to pay for business and restructuring expenses as it looks for a more long-lasting solution to its cash crunch issue. The company’s expenses greatly outweigh the money it makes from its unsuccessful bitcoin mining business.
By October 7, Celsius expects to obtain most of the refund. By the end of November, the estimate predicts that its available cash balance will be $42 million. Extrapolating its net cash flow over a weekly basis, the cash reserve will hardly endure until the end of current year.
Without taking loan repayments into consideration, the company initially predicted that it would run out of money by October. Later, noting $61 million in loans coming due, it updated its projection to indicate that it would probably survive until the end of the year.
The most recent cash-flow prediction was published in a document that listed a somewhat higher number, $70 million.
The distressed lender discovered itself in the midst of a recent cryptocurrency sector insolvency crisis. The company claimed it owed its clients $2.8 billion in cryptocurrency holdings after filing for Chapter 11 bankruptcy protection in July.
