Crypto collapse

Celsius Network: FTX gives up on idea of buying due to a bad financial record

Sam Bankman-Fried’s exchange FTX has decided to cancel its deal with Celsius Network, due to a too bad financial record.

Image Source : Coinquora

Celsius Network announced on June 12 that it was freezing withdrawals and transfers in response to “extreme market conditions,” raising heavy suspicions of insolvency.

Customers’ funds are protected?

The move left 1.7 million users unable to redeem their assets and raised fears that funds would be frozen indefinitely. And the latest information available does indeed suggest the worst.

Earlier this month, the FTX platform seemed interested in striking a deal regarding financial assistance or even the acquisition of US crypto lender Celsius Network, but ultimately decided to pull out after noticing a $2 billion hole in its balance sheet, in addition to “finding the company difficult to manage.”

In addition, investors also criticize Celsius for having a very poor management of its funds. They also question the creditworthiness of the crypto lender.

For its part, Celsius assured yesterday in a blog post that it was exploring options to “preserve and protect assets.”

Celsius says its customers’ funds are protected, and that teams are doing everything they can to stabilize these liquidity issues as soon as possible.

We continue to take significant steps to preserve and protect our assets and to explore our options. These options include pursuing strategic transactions as well as restructuring our liabilities, among others.

We are focused and working as quickly as possible to stabilize liquidity and operations so that we are positioned to share more information with the community.

These actions could include “pursuing strategic transactions” and “restructuring its liabilities,” among other strategies, the company says. “These comprehensive explorations are complex and time consuming, but we want the community to know that our teams are working with experts from many different disciplines, Celsius writes.

Finally, it should be noted that FTX, on the other hand, is reportedly close to finalizing a term sheet to buy BlockFi, another troubled crypto lender, with a deal expected to be signed by the end of the week, three sources familiar with the situation told CNBC.

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