US-Based Lending Firm Owes $439,000,000 to Embattled Crypto Firm Celsius: Report
🚀 Tip Me 🥰
A troubled crypto brokerage that recently filed for bankruptcy says they are owed hundreds of millions of dollars by a US-based private lending firm.
According to a new report by the Financial Times (FT), Alex Mashinsky, the chief executive officer of Celsius Network, said in a court filing on Thursday that an unnamed lending service owes them $439 million.
Sources familiar with the situation tells FT that Mashinksy is referring to EquitiesFirst, a firm known for lending cash to executives with their stocks as collateral.
The report says that the money owed to Celsius by EquitiesFirst is a “significant chunk” that hundreds of thousands of Celsius customers are relying on to recover at least a portion of their savings.
As stated by EquitiesFirst to FT,
“EquitiesFirst is in ongoing conversation with our client and both parties have agreed to extend our obligations.”
FT says the court filings show that Celsius’ dealings with EquitiesFirst began in 2019 when the crypto lender borrowed from them on a secured basis.
Two years later, when Celsius repaid their loan, EquitiesFirst was unable to hand back the capital “on a timely basis,” effectively flipping the borrower-lender relationship between the two companies.
EquitiesFirst’s outstanding debt to Celsius is made up of $361 million in cash and 3,765 Bitcoin (BTC), worth over $80.2 million, and is currently being paid at a rate of $5 million per month, according to the report.
Recently, Celsius filed for Chapter 11 bankruptcy after its native crypto asset plummeted by over 99% due to the lending platform halting customer withdrawals.