fbpx

Celsius investors are probably not going to fund bailout: Report

According to those acquainted with the situation, the embattled crypto lending platform Celsius Network is not on the verge of rescue.

Celsius’ Series B investment round last year was headed by Caisse de dépôt et placement du Québec, a significant Canadian pension fund, and the New York-based WestCap Group, raising the firm’s valuation to R55.9.

However, neither of them is allegedly ready to provide extra funding to Celsius, which suspended withdrawals from its platform earlier this week.

“Few are feeling ok about things,” one person familiar with Celsius’s conversations with its investors told the WSJ.

When asked about previous investments in Celsius, the person stated, “There was more risk in this than fully appreciated.”
Celsius announced a R6.4 billion Series B investment round in October last year, under heightened scrutiny from local regulators of crypto lending services, with another R5.6 billion invested in the firm in November.

Investors did not appear to be concerned at the time with the attention that crypto lending firms were receiving from regulators.

“It’s quite typical for [regulators] to begin examining some of the market leaders in order to clarify their own rules. This is part of the process of regulating a new market,” WestCap founder Laurence Tosi said last October.

Investors consider their alternatives.

According to a separate person close to the conversations, things are looking different now, with investors willing to either stand back or allow another company to try to buy Celsius. Another alternative is to simply allow the business to restructure; Celsius allegedly recruited restructuring attorneys from the law firm Akin Gump Strauss Hauer & Feld LLP earlier this week.

Celsius announced in a blog post on Sunday that it was halting all withdrawals, swaps, and transfers between accounts due to “extreme market conditions.”

Nexo, a competitor, was fast to respond to the news, submitting a proposal to acquire Celsius’ “remaining qualified assets.”
Apart from Alex Mashinsky, the CEO of Celsius, taking to Twitter on Wednesday to announce that his team is working “nonstop” on the issue and asking clients for patience, neither Nexo nor Celsius have given more remarks on the matter.

On the same day, Reuters reported that securities authorities in five states have launched investigations over Celsius’ move to halt withdrawals.

Celsius investors are probably not going to fund bailout: Report

Nonhlanhla P Dube

Nonhlanhla P Dube is a senior news reporter at Rateweb. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her directly by email at [email protected]

Scroll to top
%d bloggers like this: