This move of crypto lender Celsius to repay a hefty loan in 143 Million DAI would be a heavy hit to the rumours about the firm being on the verge of insolvency
For quite some time now, crypto lending platform Celsius has been troubled due to various reasons including its own actions in response. The beleaguered crypto lender first had to halt all their crypto operations given the market crash and massive drop in prices of cryptocurrencies. On top of that, it was unable to continue the suspended operations of withdrawal on the platform; those later acted as the reason for Celsius to receive condemnation from users and it also let the rumours of its liquidation increase heavily.
However now Celsius seems to be taking action towards turning the tables, which came in the form of its loan amount repayment. Celsius was under the debt that it took from Maker (MKR) protocol but has repaid the significant loan amount. Since the start of this month, crypto lending firms have started making efforts towards stopping self-sabotaging actions and minimizing the damage that has been done. This indirectly resulted in countering the rumours of the network collapsing and soon facing insolvency, making them baseless.
Starting from 1st July, Celsius has reportedly repaid its outstanding loan amount of about $142.8 in DAI stablecoin where the total fund transfer took place in four different transactions. With this loan repayment, Celsius has now a remaining debt of $82 million that it owed to Maker protocol. The crypto firm has a heavy burden of losses that totals for about $667.2 million, where its lifetime investments stand at $1.8 billion.
After the repayment of this loan amount, the liquidation price of Celsius on its loan in Wrapped Bitcoin (wBTC) has seen a drop and reached till $4,966.99 bitcoin (BTC). Soon after paying the $50 million in DAI, crypto firms paid off another $64 million worth DAI as loan repayment, resulting in the liquidation price for Celsius having fallen almost half.
In the past several days, many companies went through tough phases where many experienced huge losses that brought them to the verge of liquidation; where Celsius is one such company. The crypto lending firm stopped withdrawals on the platform during the mid month of June given the harsh market conditions while later it had also seen to appoint new legal counsel in order to seek restructuring.
Source: https://www.thecoinrepublic.com/2022/07/05/paid-off-maker-loans-and-celsius-got-rid-of-troubles-for-now-but-for-how-long/