Celsius Network Shares Details of Its Creditor as it Raises Cyber Threat Concerns

Bankrupt cryptocurrency company Celsius Network has disclosed the information of its creditors in a filing recently provided in court, including names, addresses, the amount owed, and email addresses amongst others.

CELSIUS2.jpg

This is in continuation of the court proceedings after the crypto firm filed for Chapter 11 bankruptcy in the US.

This step was not taken in isolation however, it is in fact a requirement of the law to ensure transparency in handling the debts owed by the firm.

The filing includes more than 14,000 pages of documents, including the details of hundreds of thousands of creditors of the crypto firm.

While several concerns have been raised by the crypto community on the adverse effect that this move by Celsius will have on its creditors, making them vulnerable to cyber threats, the bankruptcy judge in charge of the Chapter 11 proceedings, Martin Glenn has ordered that the physical addresses of the creditors be redacted, but other information should remain.

This is after the legal counsel representing Celsius had presented an appeal before the court requesting for the redaction of names to protect its creditors from being prone to cyber-attacks. 

The filing also revealed that the former CEO, Alex Mashinsky had withdrawn approximately $10 million from the network before the crash

His spokesperson stated that the withdrawal was preplanned and was used to settle tax bills. This however has raised questions and concerns about the involvement of the former CEO in the crash of the Celsius platform.

Added to this, the filing also revealed that other executives of the crypto firm had withdrawn crypto assets worth approximately $8 million.

The spokesperson for the former CEO however noted that the crypto investment of Alex Mashinsky to the tune of $44 million remains frozen on the platform.

Celsius Network filed for Chapter 11 of the Southern District of New York Bankruptcy Court in July because of the prolonged crypto winter and how it has adversely affected the business. The crypto firm, however, promised that all its creditors of about 1.4 million users will be duly compensated for their investment and there won’t be any cause for alarm.

Image source: Shutterstock

Source

Tagged : / / / /

Assets Belonging to Troubled Crypto Lender Celsius to go Under the Hammer

Celsius Network Ltd, a troubled and bankrupt crypto lender, has disclosed the auction dates for its assets.

CEL2.jpg

Based on a filing with the US Bankruptcy Court for the Southern District of New York, the deadline for the final bid has been slated for October 17, but if need be it will be pushed to October 20. 

 

The filing added:

“A sale hearing will be held on Nov. 1 at 11 a.m. before Chief US Bankruptcy Judge Martin Glenn via Zoom.”

Celsius recently revealed that it was not planning to ask its debtors to pay their outstanding loans during its Chapter 11 bankruptcy proceedings, Blockchain.News reported.

 

Founded in 2017, Celsius gave interest-bearing products to cryptocurrency owners who deposited their funds, with returns going as high as 18.6% annually. In turn, the firm would lend out cryptocurrencies to gain profits. 

 

The rain started beating the firm because it took more risk than it could handle, according to a Wall Street Journal (WSJ) report. Celsius had a total asset base of $19 billion, but its equity contribution was pegged at just $1 billion. 

 

The WSJ made the analogy that the company’s Asset-to-Equity ratio was more than double the average for all the North American banks in the S&P 1500 Composite index, which is close to 9:1.

 

Therefore, Celsius has been one of the significant crypto players that have gone down the drain amid this year’s market meltdown. Others include crypto lender Voyager Digital Ltd. and hedge fund Three Arrows Capital.

 

The native tokens of Terraform Labs, Luna, and UST stablecoin, have also crashed with the company’s founder Do Kwon still at large despite making claims that he is not in hiding.  

Image source: Shutterstock

Source

Tagged : / / / / /

Brazilian Crypto Lender BlueBenx Halts Withdrawals after Suffering Hack of $32M

Brazilian crypto lending platform BlueBenx is currently under scrutiny after it halted its users’ withdrawals.

HACK2.jpg

Per the email shared by the embattled startup to its customers, it claimed that the withdrawal halt was due to the fact that it was hacked to the tune of $32 million.

“Last week, we suffered an extremely aggressive hack in our liquidity pools on the cryptocurrency network after incessant attempts at resolution. Today we started our security protocol with the immediate suspension of operations of BlueBenx Finance products, including withdrawals, redemptions, deposits, and transfers,” the BlueBenx email shared to its customers reads.

While this story was confirmed by the platform’s lawyer, Assuramaya Kuthumi, most of the platform’s customers did not really believe the account of the platform as the core details of the supposed hack was not really made known. In response to the hack, BlueBenx suspended quite a number of its staff, as reported by the local media platform Portal do Bitcoin

“I think there’s a high probability of it being a scam because this whole hacker attack story seems like a lot of bullshit, something they invented,” a BlueBenx investor revealed to Portal do Bitcoin.

Crypto lending as an offshoot of Decentralized Finance (DeFi) has come under intense scrutiny in recent times as most platforms, even the very big and established ones, have been unable to meet customers’ demands. Most have since halted withdrawals on their platform, and BlueBenx users believe the exchange fabricated this story in part because it could not meet up with its bogus promises.

The BlueBenx platform promises investors as much as 66% in returns on specialized offerings on the platform. Lending platforms like the Celsius Network, Vauld Group, Babel Finance, and even BlockFi that offers a relatively lower rate of return have crumbled in the face of the current liquidity pressures that the crypto winter of the first half of the year ushered in.

It is unclear what will happen to BlueBenx investors following the halt of the withdrawals. The exchange has not yet declared a viable way forward.

 

Image source: Shutterstock

Source

Tagged : / / / /

Brazilian Crypto Lender BlueBenx Halts Withdrawals after Suffering $32M of Hack

Brazilian crypto lending platform BlueBenx is currently under scrutiny after it halted its users’ withdrawals.

HACK2.jpg

Per the email shared by the embattled startup to its customers, it claimed that the withdrawal halt was due to the fact that it was hacked to the tune of $32 million.

“Last week, we suffered an extremely aggressive hack in our liquidity pools on the cryptocurrency network after incessant attempts at resolution. Today we started our security protocol with the immediate suspension of operations of BlueBenx Finance products, including withdrawals, redemptions, deposits, and transfers,” the BlueBenx email shared to its customers reads.

While this story was confirmed by the platform’s lawyer, Assuramaya Kuthumi, most of the platform’s customers did not really believe the account of the platform as the core details of the supposed hack was not really made known. In response to the hack, BlueBenx suspended quite a number of its staff, as reported by the local media platform Portal do Bitcoin

“I think there’s a high probability of it being a scam because this whole hacker attack story seems like a lot of bullshit, something they invented,” a BlueBenx investor revealed to Portal do Bitcoin.

Crypto lending as an offshoot of Decentralized Finance (DeFi) has come under intense scrutiny in recent times as most platforms, even the very big and established ones, have been unable to meet customers’ demands. Most have since halted withdrawals on their platform, and BlueBenx users believe the exchange fabricated this story in part because it could not meet up with its bogus promises.

The BlueBenx platform promises investors as much as 66% in returns on specialized offerings on the platform. Lending platforms like the Celsius Network, Vauld Group, Babel Finance, and even BlockFi that offers a relatively lower rate of return have crumbled in the face of the current liquidity pressures that the crypto winter of the first half of the year ushered in.

It is unclear what will happen to BlueBenx investors following the halt of the withdrawals. The exchange has not yet declared a viable way forward.

 

Image source: Shutterstock

Source

Tagged : / / / /

Virginia Pension Fund Enters Crypto Lending Space to Enhance Returns

Fairfax County Retirements Systems, a $6.8 billion Virginia pension fund, seeks to expand its scope by entering the crypto lending market to boost its returns, according to Financial Times. 

This quest became a reality after the board of trustees gave the pension fund the greenlight to start investments in yield farming, whereby investors lend out their digital assets to crypto projects. In return, they attain a fixed stream of income. 

Katherine Molnar, the chief investment officer of the Fairfax County Police Officers Retirement System, pointed out:

“Some of the yields that you’re able to achieve in a yield farming strategy are really attractive because some of the people have stepped back from that space.”

It seems the Fairfax County Retirements Systems intends to fill the void left by various leading crypto lenders, with some filing for bankruptcy and others facing an uncertain future. 

For instance, cryptocurrency hedge fund Three Arrows Capital (3AC) filed for Chapter 15 bankruptcy last month. The hedge fund’s woes were ignited by the collapse of LUNA-UST, given that it had a significant amount of exposure, Blockchain.News reported. Other embattled crypto lenders include Voyager and Celsius Network. 

Fairfax County Retirements Systems is committed to entering this sector because it has already placed $35 million each at VanEck’s new finance income fund and Parataxis Capital’s digital yield fund. This move will be instrumental in providing investors with income through short-term lending arrangements with crypto assets.

Andrew Spellar, investment chief for Fairfax County Employees, noted:

“We started in venture capital and private equity. But once we got more comfortable in the space, we started to think a bit broader about how we might be able to use strategies in digital assets in other parts of the portfolio.”

Meanwhile, different crypto sectors continue attracting more players. For instance, Philcoin, a philanthropic blockchain movement, recently launched a staking mechanism enabling users to donate part of their earnings to charity. 

Image source: Shutterstock

Source

Tagged : / / / / / /

Celsius expands funding round to $750M, tips $7B to $10B valuation in 2022

Crypto lending firm Celsius Network has expanded its $400 million Series B round from October to $750 million as a result of oversubscription in the firm’s capital raise.

The company is now valued at $3.5 billion following the raise and CEO Alex Mashinsky told Cointelegraph he expects that figure to “double or triple” next year which would see it valued between $7B and $10.5B

The firm previously closed the round on Oct. 12 amid a period of intense scrutiny placed on crypto lending firms from local regulators. Celsius CEO Alex Mashinsky emphasized at the time that “it’s not $400 million. It’s the credibility that comes with the people who wrote those checks.”

In an announcement shared with Cointelegraph on Nov. 25, Celsius outlined that new funds will go towards expanding into new markets and product offerings, along with building its recently announced centralized finance (CeFi) to decentralized finance (DeFi) bridging project “CelsiusX”.

Celsius will also allocate funds to improving the “utility of its platform” and its commitment to sustainable Bitcoin (BTC) mining.

Speaking on the $750 million funding round with Cointelegraph, Mashinsky said that the fact that the round was oversubscribed shows a “very good indication” of the strength of the Celsius brand, which he said was user focused.

“If you think of what we do, which is pay yield to the community, you know, we paid over $1 billion to our community and we basically get that yield from exchanges and institutions. And most of our competitors […] they charge the customers fees and give all that money to their shareholders,” he said.

Celsisus outlined plans earlier this week to invest an additional $300 million into scaling its BTC mining operations in North America, taking its total spend on the sector to $500 million.

Mashinsky attributed his bullish estimate of Celsius’ value in 2022 to the firm’s ability to provide services in almost every sector of crypto, as he highlighted the growth potential of the business:

“I think that by itself it is worth several times what we invested. So between that and the growth of our core business, you know, the yield business, the lending business or the mining business, the DeFi business, all these things are obviously huge.”

The Celsius CEO also pointed to the $115 million acquisition of crypto custody platform GK8 at the start of this month, and revealed the firm has plans to enter the NFT sector in the near future, although it won’t be launching a marketplace as he feels there are already too many similar platforms out there.

“We think we can help kind of expand the category into other use cases or other ways of, you know, unlocking value for brands,” he said.

Related: Crypto lending firms on the hot seat: New regulations are coming?

Questioned on the firm’s $20 million crowdfunding round from August 2020, in which more than 1000 investors from the Celsius community backed the firm. Mashinsky said the firm was valued at around $150 million at the time, and while investors are currently unable to sell their holdings, it has turned out to be a handsome investment for them:

“Basically those 1000 people made on average, what is it, 25 times of their money or something like that? Obviously, it’s not liquid, they can’t sell it tomorrow. But we think that they are super happy.”