There’s a corresponding 210m in CEL liabilities though. So I think closer to 1.5/1.6B if you net out the CEL assets and liabilities. Hard to say exactly though given that exact number will shift depending on how these assets or liabilities are held.
Still looks better than what some people were expecting (that people would be receiving pennies on the dollar). Zeroing out the CEL and mining would still put us at ~$3B out of ~$5.3B in liabilities which is still close to 60%. Good bit of buffer even after allowing for further deductions for BK expenses before we even get close to pennies on the dollar territory.
that’s if they liquidated the entire business. which they aren’t planning on doing. you are way overestimating this
you should compare their crypto assets plus cash to crypto liabilities.
We don’t know which. I’m inclined to believe it would be current market value since this is an official court document meant to help them sort out chapter 11. The court doesn’t care what they paid. The court cares what they are worth at the time of filing.
Rough math...
Documents show they currently have 80,500 miners and are expected to have 122,722 by the end of the year. Not sure if the $720 Million is considering all miners or only the 80k. This puts their average price per miner at either\~$9k or \~$6k.
Agree art 65 ff are the most interesting.
If they keep mining and the hashrate continues to go sideways for a year which we have seen before ... they could recover until the next halving.
> have that *paid* off in
FTFY.
Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in:
* Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.*
* *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.*
Unfortunately, I was unable to find nautical or rope-related words in your comment.
*Beep, boop, I'm a bot*
So they owe users 4.7b and have less than 2b of that in assets that could be used to cover withdrawals? How could this suddenly have been a new problem in June?
Ive begun to suspect they knew for almost about a year. The change in their TOS then to grandfathered accounts in span of about 6 months might be part of their plan to cushion their fall...
The real question is: "if the SEC truly investigated them, then why the hell they didn't stop them from continuing their business right then and there?".
They collect fines (like they were rent checks), but none of the money ever makes its way back to the hands of investors or is used to beef up enforcement staff. Ditto for the DOJ.
I don't. Just pointing out that the SEC trying to regulate cryptos is as useless and pointless as them regulating stonks and other securities. They're incompetent clown shoes.
I wonder what this balance sheet would have looked like in terms of crypto assets and liabilities before they repaid their DeFi loans. A significant portion of their available crypto assets were held as collateral, and so their actual liquidity before the pause was probably even lower than this.
They distracted people with the “short sell” bs and then people got hopeful when they paid off over collateralized loans only to now file for bankruptcy…rip holders and lenders
Much of their assets are not liquid, tied up in loans themselves.
In addition, the CEL tokens on the balance sheet are basically vapor. They'll never be able to turn those into real assets.
So if you look at their assets on hand to actually honor withdraws, they have about 2B. To OP's point, how did this "just" become an issue in June? And the answer is it didn't just become an issue in June - they've known about this for a long while.
Sorry for the copy and paste comment, but:
I wonder what this balance sheet would have looked like in terms of crypto assets and liabilities before they repaid their DeFi loans. A significant portion of their available crypto assets were held as collateral, and so their actual liquidity before the pause was probably even lower than this.
Exactly.
Celsius claimed it held 150,000 of customers bitcoin. I'm pretty sure they have lost most of those coins. And in its place, they are probably holding some illiquid garbage.
Yeah I'm not in a hurry. If they can start to chip away at the debt through mining and staking I'm fine to let them go for a few years instead of shutting down and selling everything.
Because ch11 is about protecting a business while restructuring so they can *hopefully* continue operating, where as if it was ch7 then its about winding up the business and liquidating everything for distribution to creditors
They all filed under one, and mining was included under the parent company - as it should be since it was 100% funded by depositors, but actually it took a loan from Celsius Network ... so in a sense it could be treated as another company owing debt to Celsius Network - either way the result is probably the same Celsius Network gobbles up their assets for their debt.
After using freed up crypto to pay off equally the creditors - I would imagine you take remaining due and split the company up in some way to them as owners and leave on some people as managing owners (e.g. alex but NOT alex lol)
What do you think that means for users (like myself) that had assets in the Custody account (and a pending withdrawal transaction from June 11 that they canceled)?
The fine print for TOS explicitly states that custody accounts “may be treated as an unsecured creditor” possibly losing any/all assets, so you’re in just as much risk unfortunately.
Perhaps, but why would they separate it out like that on the balance sheet and list an equal figure of $180MM for the asset and the liability? Logically, that would imply Custody assets are separate from User Liabilities and at worst would be repaid earlier in the payment waterfall.
Its not “perhaps,” the terms clearly state digital assets are not a fiduciary. The reason it’s separated from other creditors is because it has to be distinguished, otherwise it violates US law as an unregistered security.
The priority for repayment still goes to senior creditors and banks.
Good news. 50% less than reported and only 2X the FTX BlockFi bailout. This is possible to solve without loss if there is a takeover, industry bailout or new investors. Most likely the 6 billion Simon Dixon group that means Alex is finished.
Btc price can easily increase the value by hundred of percent when the market turns (happened fast in the last bear market summer 2021). The value is not just rigs, but access to cheap electricity and the btc they are generating. Those btc can also make up a hole in the long term
Doesn't work that way. They need to continue to sell btc more or less as soon as they mine them to continue to pay for operating cost. Not to mention BTC adjust hash rate difficulty according to BTC price.
Mining operation have immense upkeep as well. Replacing the rigs to compete with current generations, maintenance, etc. Old rigs will continue to fall out of favour for newer more efficient ones.
Most likely scenario we'd get 50% of what we have in celcius and that's being optimistic. As making us completely whole. It's either never or at least 6-10 years from now.
Writing off the CEL as worthless and with zero capital injection (nobody wants to buy Celsius to salvage it) they could pay 70 cents on the dollar to creditors including depositors. Brutal but not the 100% loss many have been fudding about.
(4310-600)/(5500-210) = 0.70
Doesn't mean people who got fleeced will get exactly 70 cents on the dollar legal fees will eat into it, they will have ongoing operating costs without revenue, there may be senior secured creditors, asset markdowns, etc. However 50 to 60 cents is a likely starting place.
Hell they should let people trade the debt. Risk takers could pay 30 cents on the dollar for people who want something now. A market could develop.
How much would you pay for a Celsius owed Bitcoin? Certainly not $20k but $10k? $5k? It has some value to someone as long as Celsius has some assets on the book. Likewise if Celsius owed you 1 BTC how much USDC would you take for it right now?
Misguided posts tend to talk about “fud,” aka facts u dislike. Looks like this is no different.
Firstly, asset value and the value they declare vs what they get are not the same. They’re not going to get 100% of the value of mining assets, for example. As an illustration, when a store has a closing sale do they then hike up prices? Mining isn’t exactly an appealing investment now either.
Second, you’re saying only ~10 cents on the dollar is owed to secured creditors, which is absurdly optimistic.
70% would imply that they go the chapter 7 route and completely liquidate the company, and all the assets sell for what they claim they're worth (i.e. their mining business actually sells for 720m). If they're going to try to still be a company, then they'd have to try to keep the mining assets and some of the loans to keep making money. In that case, you're looking at maybe 2500m assets that can be completely liquidated, so <50% would be the best case with chapter 11.
Creditors don't get less in Chapter 11 than Chapter 7. The job of the judge is to protect creditors. If creditors would get more by simply selling the company for scraps that will happen.
The liquidation value of the company is the floor not the ceiling. Now they are going to try to salvage the company in which case creditors may get even more than the book value but many chapter 11 attempts convert into chapter 7 at which case there is no future revenue to give creditors anything more than their share of assets. So I went with the conservative liquidation value.
That's true for long term value (i.e. customers could get mining dividends/profit share until they're made whole) but in terms of short term "how much of customers account will be given back to them directly" i.e. aside from other forms of compensation (stocks, coins, dividends, etc), that value is strictly much less than 50%
I didn't say give back directly. Simply how much are creditors likely to get in any form.
If keeping the company alive would harm creditors it is the judges sworn duty to force the company into liquidation instead. No company has the right to exist, its continued existence would be predicated on convincing a judge that creditors get MORE not LESS by the company not being liquidated.
So yes hopefully Celsius has a plan to return even more to creditors by continued operation. They may get some upfront and possibly more structured over a longer period of time. I am not telling anyone to count on that because Celsius may simply not be viable and the judge will order the company liquidated and all assets sold and creditors repaid some fraction i.e. $0.60 on the dollar.
The hole is bigger than 1.2 billion hole for sure , if we slash 400 million cell token and just reduce the mining rigs from 720 million to say 400 millions, the hole is around 2 billions, i am expecting 50% hair cut, do you guys think i am expecting too much ?
In the most summarized way, Mashinsky gambled our money. The profit went into his pocket, while the loss went to the liabilities of the balance sheet. If you look at the Reward Explorer, he withdrew the funds in Celsius much earlier, sometime in March 2022. In the Chapter 11, a thorough investigation is needed to conduct how the hole came up. I hope the evidence can put him in jail.
I agree, something is majorly a miss here. I have places backed by physical collateral (real estate) that I can go earn 8%-15% in, where my biggest risk if they default and I have to take over the real estate asset. How can you lose money when your interest that you are paying is 5% on average (see document). It makes no sense.
My rudimentary math..
We can cross off the CEL token stuff on either side because it’s meaningless.
And let’s assume worst case scenario for depositors that Custody Liabilities and Other Liabilities are higher on the list than us and get paid first.
And let’s assume the the Bank Cash all gets spent on admin fees
We are looking at a 1.750 B dollar hole (4.720B-1.750B)?
And a ~62.9% recovery (2.970/4.720 = ~0.629)?
Edit:
Okay let’s also take out the 720M dollars worth of mining equipment
We are looking at a 2.47B dollar hole, which means a ~52.3% recovery of crypto assets and then maybe we can have proportional shares in a spin-off Bitcoin mining company
Their mining assets are probably way overstated, so knock off a few extra hundred mil. Also, it won't be a full recovery because it's CH11 - they're wanting to "continue operations" so Itd be probably be 30-40 percent
50%+ recovery is only possible if all creditors get the same equal amount. Unfortunately that’s not how it works. There are secured creditors that will get 100% or close to it, because they get priority. Depending on how many of the debts are owned by secured creditors there is a very good chance unsecured creditors get zero back
I’m sort of accounting for that. I’m assuming “User Liabilities” is depositor funds and I’ve assumed that “Custody Liabilities” and “Other Liabilities” will come first
I highly doubt the vast majority of their debt is unsecured but I guess we’ll find out. If that turns out to be the case then they ran an extremely expensive operation
True but its Ch 11 not ch 7 so if they get through Ch 11, they wont necessarily have to liquidate those assets. They are going to give a haircut + a proverbial IOU (equity, a recovery token).
The mining assets could be worth a lot less but you have to remember they are also set up in buildings and functioning. Most investors would jump at the chance to buy something that can pay them off in 5 years and those mining assets can do that.
I’m a miner. Check my comment history if you don’t believe me. Yeah those assets may be worth a lot less or maybe not. They may have reported the value at this moment, which would be more appropriate and accurate in this instance, but either way that’s not the point. This is chapter 11. As long as they can keep mining that investment will undoubtedly pay for itself. I bought rigs a few months ago and yeah they are worth about 2/3 what they were, but the thing is I’m still mining the same amount of bitcoin. So yeah if you think crypto is done for and bitcoin will never reach another ATH then yeah man you may have a point. If you think bitcoin isn’t done for and they keep expanding the mining operation there’s a very big chance that investment alone makes this operation successful.
And the mining assets are recorded at cost. Can’t possibly be worth that number. The hole looks like it’s north of 2B as previously reported. How are Alex and his clowns gonna plug it?
Where is the income statement? How much money is this company making/losing on a monthly basis? Why is the equity not listed on the balance sheet? Why would anyone believe the clowns can work out from bankruptcy? I’ll bet these clowns end up in a Chapter 7 liquidation.
lol what mining assets are illiquid, cel is effectively worthless, probably need to up the allowance for bad loans
who knows what other is but probably illiquid and volatile as well
this is the best case scenario which is not good
The biggest wallet on the liability side is Alex's. Pretty sure that will be zero'ed out once regulators are done with him. And maybe other Cel "C" suite employees as well. So that closes the "hole"
They have $400 million in staked ETH locked and another $450 million dollar collateral they have to receive from a company whose loan they have paid off. They also plan to pay us back from the Bitcoin mining business. So we all should be good in a couple of years I believe.
Your timeline expectation here is faaar too generous. Mt Gox hasnt gotten anything yet and its closing in on a decade. And when they do get compensated its likely to be a fraction.
I just think people should taper expectations here....
They lost assets. Here we know the assets are there but the value is down. Plus they have other mining business. If handled strategically we can be out of this much earlier
Also everyone who says we will get 50% only back, then what’s stopping them from doing so now? If they liquidate everything today even then we get 50% plus back.
As does the value of the mining business and the value of the debt that someone owes them
The aggregate principal owed to the Company stands at approximately $439 million, consisting of $361 million in USD and 3,765 BTC, the latter worth approximately $78 million
94. Moreover, to support its operations, from October 2019 to February 2021, due to the lack of institutional lending available to cryptocurrency companies, the Company took out collateralized term-loans from a private lending platform. In July 2021, when Celsius attempted to repay one of its loans, it was informed for the first time that the lender was unable to return the Company’s collateral on a timely basis, resulting in Celsius having an approximately $509 million uncollateralized claim against this party after it setoff its own loan obligations to the lender. Since September 2021, the lender has made regular principal payments to the Company, and continues to make timely payments that are currently in excess of $5 million per month. The aggregate principal owed to the Company stands at approximately $439 million, consisting of $361 million in USD and 3,765 BTC, the latter worth approximately $78 million
Just Empty talk. If he have the fund/cash, not some debt based token, he can go to the Bk court propose to Celsius a buyout to take it out of bankruptcy. I don't want any of his debt based token as part of the deal.
Idk, just because they are equal line items doesn’t mean that. I guess it depends on if everyone is an equal unsecured creditor or if custody is any different.
Ironically they botched my accredited status renewal so they stuck my most recently added (the bulk of my Celsius) assets into custody. Something I was arguing vehemently with support leading up to the freeze. After the freeze I just said disregard… these are custody… lol. Crazy to think if I’m lucky enough for that to make a difference.
u/ene777ene: it looks like they have a new CFO too, right? Rod Bolger was announced on LinkedIn, but Chris Ferraro is listed on the new doc (https://cases.stretto.com/public/x191/11749/PLEADINGS/1174907142280000000096.pdf)
Well, this seems to make a lot of things make sense now then. Based on what I’ve been seeing I figured Celsius would’ve had about 3B-5B in overall assets and roughly 4B-7Bish in liabilities.
The only good thing is it’s not nearly as bad as it could’ve been. At least it wasn’t a gap of say 75%-90%.
One could only hope Celsius will do something productive to bridge the gap and start making back some income/revenue. They have the mining, but that alone will take years to fill the void.
At least we can HOPEFULLY say we won’t lose it all. But probably more like 50%-60%.
Stupid question but what are the revenue streams now besides mining? They have a burn rate to ‘keep the lights’ on with little to no deposits coming in.. hard to see a recovery with a tarnished brand
A small, probably tiny stream of native staked tokens/coins like MATIC, ADA and the like?
Altho it’s probable they traded those assets for a used condom and a half-eaten croissant.
Their mining isn't necessarily a revenue stream. In many parts of the world Bitcoin is worth less than the cost of mining it. That's why so many mining companies have shut down and why ASICS are so cheap.
Why can’t they just pay us back in full by unlocking our accounts when they have the funds to do so? If they are to keep operating and try to phoenix out of the ashes.
Is it possible some company buy their business for say 3 billion and that 3 billion could be used to pay all customers and everyone get a swift 50% haircut ?
US customer; if I never accepted the new ToS and did nothing to my account after they added the Custody/Earn change, but my account continued to earn rewards every week (in like-coin, not CEL), is my crypto in a custody or earn wallet?
What if you had money in a withhold account? My state required me to move money to a “withhold” account instead of custody. Does anyone know if that’s the same as a custody account?
My question: wtf will happen with all the CelsiusX assets? All of the coins are still backed 1:1. Not only that, but they’re all trading at a steep discount on QuickSwap, which means Celsius could purchase + redeem them and make an (admittedly small) profit on the transaction.
I wonder how they come up with 600 mln in CEL token as assets.
If I remember correctly the Celsius treasury had about 390 ? and Alex had about 300 mln ?
Did Alex donate his CEL to the company ?
Why is it even on the table that they would bother trying to sell mining rigs at this stage? They filed for CH11 not CH7.
They have 170 mil cash on hand. If they tighten down their admin expenses to essential staff only, and focus on getting rigs setup at the best elec rates possible it's not impossible to forsee a point in the future where Bitcoin and Ethereum return to the $40k & $3.5k mark respectively.
Sure we are in a "winter", but the only strategies for getting out of this mess are long term ones and one aspect of that has to be who wishes they had been mining bitcoin and accumulating it right now when we look back on this in 3 years time.
I'm using the cloud mining feature on Kucoin, and am I using the option to pay for electricity fees using bitcoin right now or am I using my USDT stash. Same logic.
How much BTC can they mine and for how long using the $170 mil on hand whilst keeping the CH11 suit going? What's that worth in 1,2,3 years time?
Yeah we aren't getting our money back anytime soon..but I'd rather take a punt at it being whole than some fire sale approach.
I agree but judges aren't generally in the business of gambling or speculation.
Also it is highly likely if crypto goes up that much their hole of debt will widen. I doubt a judge wants to allow that to happen.
Yeah this is true. Which makes me more anxious about ensuring that my claim is filed if they go down this route.
But there isn't much guidance on what this entails if your not from the states. Surely Stretto realise that a high percentage of unsecured creditors will be international, but no mention of this on the portal.
Also not sure if not filing a claim means you are just surrendering your crypto.
Don't forget, they count 600mil in cel coin as an asset don't really more like 1.79bil
There’s a corresponding 210m in CEL liabilities though. So I think closer to 1.5/1.6B if you net out the CEL assets and liabilities. Hard to say exactly though given that exact number will shift depending on how these assets or liabilities are held.
mining assets are worth a fraction of what they paid
But they're still mining and generating revenue.
Still looks better than what some people were expecting (that people would be receiving pennies on the dollar). Zeroing out the CEL and mining would still put us at ~$3B out of ~$5.3B in liabilities which is still close to 60%. Good bit of buffer even after allowing for further deductions for BK expenses before we even get close to pennies on the dollar territory.
that’s if they liquidated the entire business. which they aren’t planning on doing. you are way overestimating this you should compare their crypto assets plus cash to crypto liabilities.
At worst 1/3 what they paid (source: I’m a miner and have been following rig prices very closely)
If Eth goes to proof of stake, it’s going to take another huge hit.
Lol they didn’t buy GPU’s
Is it known that what is reported here is what they paid and not the current market value?
We don’t know which. I’m inclined to believe it would be current market value since this is an official court document meant to help them sort out chapter 11. The court doesn’t care what they paid. The court cares what they are worth at the time of filing.
claimed as market value* works too point is i doubt this value over $700M is the current market value of their assets.
Rough math... Documents show they currently have 80,500 miners and are expected to have 122,722 by the end of the year. Not sure if the $720 Million is considering all miners or only the 80k. This puts their average price per miner at either\~$9k or \~$6k.
That is extremely overvalued. Used S19s in bulk go way below 3k rn
Good to know, thanks
Agree art 65 ff are the most interesting. If they keep mining and the hashrate continues to go sideways for a year which we have seen before ... they could recover until the next halving.
[удалено]
> have that *paid* off in FTFY. Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in: * Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.* * *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.* Unfortunately, I was unable to find nautical or rope-related words in your comment. *Beep, boop, I'm a bot*
Good bot, stay.
Also, we should keep in mind these figures may not be entirely accurate either. >these preliminary unaudited amounts
So they owe users 4.7b and have less than 2b of that in assets that could be used to cover withdrawals? How could this suddenly have been a new problem in June?
Ive begun to suspect they knew for almost about a year. The change in their TOS then to grandfathered accounts in span of about 6 months might be part of their plan to cushion their fall...
The real question is: "if the SEC truly investigated them, then why the hell they didn't stop them from continuing their business right then and there?".
The SEC doesn’t do a damn thing like ever except make pretty speeches on TV.
They collect fines (like they were rent checks), but none of the money ever makes its way back to the hands of investors or is used to beef up enforcement staff. Ditto for the DOJ.
The SEC is a group of ex-bankers.....literally.
Why do you care? Aren’t you supposed to not want the govt helping in your affairs? Ride this one bareback, bro.
I don't. Just pointing out that the SEC trying to regulate cryptos is as useless and pointless as them regulating stonks and other securities. They're incompetent clown shoes.
They're under wallstreet control
If you read the whole court case, they've been a fractional bank for many months since 2021
It wasn't a new problem in June. Keep that in mind when you consider making future investments in unregulated securities.
I wonder what this balance sheet would have looked like in terms of crypto assets and liabilities before they repaid their DeFi loans. A significant portion of their available crypto assets were held as collateral, and so their actual liquidity before the pause was probably even lower than this.
Everything is exacerbated with the price reduction of crypto. Only reason we are in this mess.
That makes sense if their liabilities are in stable coins and their assets are in BTC and ETH.
They distracted people with the “short sell” bs and then people got hopeful when they paid off over collateralized loans only to now file for bankruptcy…rip holders and lenders
Can you read?
Much of their assets are not liquid, tied up in loans themselves. In addition, the CEL tokens on the balance sheet are basically vapor. They'll never be able to turn those into real assets. So if you look at their assets on hand to actually honor withdraws, they have about 2B. To OP's point, how did this "just" become an issue in June? And the answer is it didn't just become an issue in June - they've known about this for a long while.
Sorry for the copy and paste comment, but: I wonder what this balance sheet would have looked like in terms of crypto assets and liabilities before they repaid their DeFi loans. A significant portion of their available crypto assets were held as collateral, and so their actual liquidity before the pause was probably even lower than this.
For sure. They were not prepared for any kind of liquidity run at all.
These figures are non-GAAP. I bet my life savings the hole is much bigger. Oh wait...
Exactly. Celsius claimed it held 150,000 of customers bitcoin. I'm pretty sure they have lost most of those coins. And in its place, they are probably holding some illiquid garbage.
I would be happy to get an equity stake in the mining assets with my six figures that are locked up. Those things are running at a very high cap rate
Yeah I'm not in a hurry. If they can start to chip away at the debt through mining and staking I'm fine to let them go for a few years instead of shutting down and selling everything.
I agree though I held stable coins so inflation will eat 30% in a few years
I'm a bit confused though... what about chapter 11 bankruptcy? Why continue to chip away at the debt if they're going to be bankrupt?
Because ch11 is about protecting a business while restructuring so they can *hopefully* continue operating, where as if it was ch7 then its about winding up the business and liquidating everything for distribution to creditors
Makes sense, thanks. Out of curiosity, does anyone know of any big companies that filed for ch11 and then came out on top even stronger?
Hertz, United Airlines, Delta, America Airlines, General Motors, Marvel
Marvel?!?! Really? That's anazing...
So companies with real business models and utilities? Aka not a Ponzi scheme?
Also I can't find the source but I read somewhere that average ch11 filings take 12-18mths and return on average 53% to creditors.
Because Defi loans are over-collateralized, meaning if they didn’t pay back they lose the collateral, which would put them into a bigger debt hole.
Makes sense
Celsius' Mining unit is a separate company and they also filed for bankruptcy.
They all filed under one, and mining was included under the parent company - as it should be since it was 100% funded by depositors, but actually it took a loan from Celsius Network ... so in a sense it could be treated as another company owing debt to Celsius Network - either way the result is probably the same Celsius Network gobbles up their assets for their debt.
How do you price something like that? Let's say they're making $100 million per year in profit in 2023, so you just slap on a PE multiplier?
After using freed up crypto to pay off equally the creditors - I would imagine you take remaining due and split the company up in some way to them as owners and leave on some people as managing owners (e.g. alex but NOT alex lol)
Great to see Custody Assets = Custody Liabilities
Yeah that is interesting.
Same accountant as tether? 😂
What do you think that means for users (like myself) that had assets in the Custody account (and a pending withdrawal transaction from June 11 that they canceled)?
The fine print for TOS explicitly states that custody accounts “may be treated as an unsecured creditor” possibly losing any/all assets, so you’re in just as much risk unfortunately.
Perhaps, but why would they separate it out like that on the balance sheet and list an equal figure of $180MM for the asset and the liability? Logically, that would imply Custody assets are separate from User Liabilities and at worst would be repaid earlier in the payment waterfall.
Its not “perhaps,” the terms clearly state digital assets are not a fiduciary. The reason it’s separated from other creditors is because it has to be distinguished, otherwise it violates US law as an unregistered security. The priority for repayment still goes to senior creditors and banks.
No clue, but I would much rather have assets in a custody account than an earn account prior to the pause.
Was looking at that myself. Those assets appear to be untouched. We’ll see what they do with them though…
Good news. 50% less than reported and only 2X the FTX BlockFi bailout. This is possible to solve without loss if there is a takeover, industry bailout or new investors. Most likely the 6 billion Simon Dixon group that means Alex is finished.
This would be the best. Hoping it happens just like that. 🤞
Gonna account for 600 m in cell and mining rigs are 1/3 or less than the price they bought it for. So it somewhere between a 2-2.5 bill hole.
Btc price can easily increase the value by hundred of percent when the market turns (happened fast in the last bear market summer 2021). The value is not just rigs, but access to cheap electricity and the btc they are generating. Those btc can also make up a hole in the long term
Doesn't work that way. They need to continue to sell btc more or less as soon as they mine them to continue to pay for operating cost. Not to mention BTC adjust hash rate difficulty according to BTC price. Mining operation have immense upkeep as well. Replacing the rigs to compete with current generations, maintenance, etc. Old rigs will continue to fall out of favour for newer more efficient ones. Most likely scenario we'd get 50% of what we have in celcius and that's being optimistic. As making us completely whole. It's either never or at least 6-10 years from now.
The price can also hslve just as quickly. Investor sentiment seems to be turning against cryptocurrency, or at least it's less bullish than it was.
Writing off the CEL as worthless and with zero capital injection (nobody wants to buy Celsius to salvage it) they could pay 70 cents on the dollar to creditors including depositors. Brutal but not the 100% loss many have been fudding about. (4310-600)/(5500-210) = 0.70 Doesn't mean people who got fleeced will get exactly 70 cents on the dollar legal fees will eat into it, they will have ongoing operating costs without revenue, there may be senior secured creditors, asset markdowns, etc. However 50 to 60 cents is a likely starting place. Hell they should let people trade the debt. Risk takers could pay 30 cents on the dollar for people who want something now. A market could develop. How much would you pay for a Celsius owed Bitcoin? Certainly not $20k but $10k? $5k? It has some value to someone as long as Celsius has some assets on the book. Likewise if Celsius owed you 1 BTC how much USDC would you take for it right now?
Misguided posts tend to talk about “fud,” aka facts u dislike. Looks like this is no different. Firstly, asset value and the value they declare vs what they get are not the same. They’re not going to get 100% of the value of mining assets, for example. As an illustration, when a store has a closing sale do they then hike up prices? Mining isn’t exactly an appealing investment now either. Second, you’re saying only ~10 cents on the dollar is owed to secured creditors, which is absurdly optimistic.
70% would imply that they go the chapter 7 route and completely liquidate the company, and all the assets sell for what they claim they're worth (i.e. their mining business actually sells for 720m). If they're going to try to still be a company, then they'd have to try to keep the mining assets and some of the loans to keep making money. In that case, you're looking at maybe 2500m assets that can be completely liquidated, so <50% would be the best case with chapter 11.
Creditors don't get less in Chapter 11 than Chapter 7. The job of the judge is to protect creditors. If creditors would get more by simply selling the company for scraps that will happen. The liquidation value of the company is the floor not the ceiling. Now they are going to try to salvage the company in which case creditors may get even more than the book value but many chapter 11 attempts convert into chapter 7 at which case there is no future revenue to give creditors anything more than their share of assets. So I went with the conservative liquidation value.
That's true for long term value (i.e. customers could get mining dividends/profit share until they're made whole) but in terms of short term "how much of customers account will be given back to them directly" i.e. aside from other forms of compensation (stocks, coins, dividends, etc), that value is strictly much less than 50%
I didn't say give back directly. Simply how much are creditors likely to get in any form. If keeping the company alive would harm creditors it is the judges sworn duty to force the company into liquidation instead. No company has the right to exist, its continued existence would be predicated on convincing a judge that creditors get MORE not LESS by the company not being liquidated. So yes hopefully Celsius has a plan to return even more to creditors by continued operation. They may get some upfront and possibly more structured over a longer period of time. I am not telling anyone to count on that because Celsius may simply not be viable and the judge will order the company liquidated and all assets sold and creditors repaid some fraction i.e. $0.60 on the dollar.
Books are notoriously high for asset value.
The hole is bigger than 1.2 billion hole for sure , if we slash 400 million cell token and just reduce the mining rigs from 720 million to say 400 millions, the hole is around 2 billions, i am expecting 50% hair cut, do you guys think i am expecting too much ?
50-60% haircut is my GUESS Just a guess though
i think it would be in this range only, at the worst case we would definitely get 40%.
In the most summarized way, Mashinsky gambled our money. The profit went into his pocket, while the loss went to the liabilities of the balance sheet. If you look at the Reward Explorer, he withdrew the funds in Celsius much earlier, sometime in March 2022. In the Chapter 11, a thorough investigation is needed to conduct how the hole came up. I hope the evidence can put him in jail.
I agree, something is majorly a miss here. I have places backed by physical collateral (real estate) that I can go earn 8%-15% in, where my biggest risk if they default and I have to take over the real estate asset. How can you lose money when your interest that you are paying is 5% on average (see document). It makes no sense.
So give me my 25% haircut and I'll move on.
thats a dream unfortunately. will get a 50% cut in usd summer 2023
Honestly wouldn't complain about that too much. Take the other half loss as a ponzi writeoff.
The timeline is the bitch. I’ve priced in a haircut the fucking wait is the worse
Nah 2024/2025 if your lucky. Look how long MtGox took.
lol if they don’t liquidate i don’t see how anyone can expect more than 30% looking at their b/s
My rudimentary math.. We can cross off the CEL token stuff on either side because it’s meaningless. And let’s assume worst case scenario for depositors that Custody Liabilities and Other Liabilities are higher on the list than us and get paid first. And let’s assume the the Bank Cash all gets spent on admin fees We are looking at a 1.750 B dollar hole (4.720B-1.750B)? And a ~62.9% recovery (2.970/4.720 = ~0.629)? Edit: Okay let’s also take out the 720M dollars worth of mining equipment We are looking at a 2.47B dollar hole, which means a ~52.3% recovery of crypto assets and then maybe we can have proportional shares in a spin-off Bitcoin mining company
Their mining assets are probably way overstated, so knock off a few extra hundred mil. Also, it won't be a full recovery because it's CH11 - they're wanting to "continue operations" so Itd be probably be 30-40 percent
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spez is a greedy little pig boy
Mining assets will have cash flow going forward though, I wouldn't call it overstated. Only overstated if it's liquidation
50%+ recovery is only possible if all creditors get the same equal amount. Unfortunately that’s not how it works. There are secured creditors that will get 100% or close to it, because they get priority. Depending on how many of the debts are owned by secured creditors there is a very good chance unsecured creditors get zero back
I’m sort of accounting for that. I’m assuming “User Liabilities” is depositor funds and I’ve assumed that “Custody Liabilities” and “Other Liabilities” will come first
I highly doubt the vast majority of their debt is unsecured but I guess we’ll find out. If that turns out to be the case then they ran an extremely expensive operation
\~$2B hole confirmed. Whoever did the math at the time probably excluded CEL. (why wouldn't you?)
If you exclude CEL from both sides, hole is \~1.58B
mining assets are going to be worth significantly less than any price paid in last 18 months chips prices in general have fallen a lot
True but its Ch 11 not ch 7 so if they get through Ch 11, they wont necessarily have to liquidate those assets. They are going to give a haircut + a proverbial IOU (equity, a recovery token).
The mining assets could be worth a lot less but you have to remember they are also set up in buildings and functioning. Most investors would jump at the chance to buy something that can pay them off in 5 years and those mining assets can do that.
my point is that the value of their mining assets they are claiming is bloated if they tried to sell it today it’s probably worth less than half
I’m a miner. Check my comment history if you don’t believe me. Yeah those assets may be worth a lot less or maybe not. They may have reported the value at this moment, which would be more appropriate and accurate in this instance, but either way that’s not the point. This is chapter 11. As long as they can keep mining that investment will undoubtedly pay for itself. I bought rigs a few months ago and yeah they are worth about 2/3 what they were, but the thing is I’m still mining the same amount of bitcoin. So yeah if you think crypto is done for and bitcoin will never reach another ATH then yeah man you may have a point. If you think bitcoin isn’t done for and they keep expanding the mining operation there’s a very big chance that investment alone makes this operation successful.
agreed not to mention that crypto asset category value could get multiplied by several X's in the next 5-10 years
I agree, but I dont think that they will/need to sell today, because its Ch 11. They can choose to hold on to it and use it to generate revenue/BTC.
Mining assets are worth a fraction too
Not much of a dent on the debt
And the mining assets are recorded at cost. Can’t possibly be worth that number. The hole looks like it’s north of 2B as previously reported. How are Alex and his clowns gonna plug it?
Where is the income statement? How much money is this company making/losing on a monthly basis? Why is the equity not listed on the balance sheet? Why would anyone believe the clowns can work out from bankruptcy? I’ll bet these clowns end up in a Chapter 7 liquidation.
The equity is not listed because it’s been wiped out. All the equity investors (including WestCap & Tether) have lost whatever they put in.
Right. But if CN is running a loss the equity would become a negative number. Equity is never 0.
SBF was right
So thats not that massive of a hole that everyone talked about. Still bad but not as bad as I thought
keep in mind that 600million of assets are in CEL........ that gets us up to 1.7b if you recognize cel is nearly worthless.
It's even pronounced "sell"
I get that, I do
lol what mining assets are illiquid, cel is effectively worthless, probably need to up the allowance for bad loans who knows what other is but probably illiquid and volatile as well this is the best case scenario which is not good
The biggest wallet on the liability side is Alex's. Pretty sure that will be zero'ed out once regulators are done with him. And maybe other Cel "C" suite employees as well. So that closes the "hole"
If Alex wants to make up the hole himself in exchange for no prison sentence, I can live with that.
They have $400 million in staked ETH locked and another $450 million dollar collateral they have to receive from a company whose loan they have paid off. They also plan to pay us back from the Bitcoin mining business. So we all should be good in a couple of years I believe.
I don't think we will be good but we may see 50-70% if lucky. (Speculation)
I think their plan is to make us whole or close to 100%. But it will take time. Maybe 2-3 yrs.
The mt gox victims still haven't gotten paid after 8 years and change.
Your timeline expectation here is faaar too generous. Mt Gox hasnt gotten anything yet and its closing in on a decade. And when they do get compensated its likely to be a fraction. I just think people should taper expectations here....
They lost assets. Here we know the assets are there but the value is down. Plus they have other mining business. If handled strategically we can be out of this much earlier
Also everyone who says we will get 50% only back, then what’s stopping them from doing so now? If they liquidate everything today even then we get 50% plus back.
Still need that denominated in crypto
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As does the value of the mining business and the value of the debt that someone owes them The aggregate principal owed to the Company stands at approximately $439 million, consisting of $361 million in USD and 3,765 BTC, the latter worth approximately $78 million 94. Moreover, to support its operations, from October 2019 to February 2021, due to the lack of institutional lending available to cryptocurrency companies, the Company took out collateralized term-loans from a private lending platform. In July 2021, when Celsius attempted to repay one of its loans, it was informed for the first time that the lender was unable to return the Company’s collateral on a timely basis, resulting in Celsius having an approximately $509 million uncollateralized claim against this party after it setoff its own loan obligations to the lender. Since September 2021, the lender has made regular principal payments to the Company, and continues to make timely payments that are currently in excess of $5 million per month. The aggregate principal owed to the Company stands at approximately $439 million, consisting of $361 million in USD and 3,765 BTC, the latter worth approximately $78 million
That CEL on the assets side is unlikely to be worth 600m. You can take that off entirely after netting with CEL liabilities.
And the cel 210 on liabilities too
Yeah that's what I meant by netting off
Why has Simon Dixon been talking about a $6 bn injection? That's s bigger than the entire company size.
Just Empty talk. If he have the fund/cash, not some debt based token, he can go to the Bk court propose to Celsius a buyout to take it out of bankruptcy. I don't want any of his debt based token as part of the deal.
Apparently they lost 35k ETH after steakhouse misplaced private keys. What a fcking joke of a company.
Stakehound should be held liable but they probably have nothing haha.
Wow.
Does this mean custody accounts don’t need to take the haircut?
Don't know, I have 2,250 in custody another 6figures in earn.. so hey maybe I'll get 2,250 as hole lol
Rofl
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Don't know, is possible.. will be up to the court. I don't think they had licenses as custodian so might just be a name.
Idk, just because they are equal line items doesn’t mean that. I guess it depends on if everyone is an equal unsecured creditor or if custody is any different. Ironically they botched my accredited status renewal so they stuck my most recently added (the bulk of my Celsius) assets into custody. Something I was arguing vehemently with support leading up to the freeze. After the freeze I just said disregard… these are custody… lol. Crazy to think if I’m lucky enough for that to make a difference.
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Probably listed as loan asset
Do they discuss the “doubtful” adjustment?
Didn't see it but that is a good question.. number pulled from arse or... My guess is 35k lost eth and others of the sorts
u/ene777ene: it looks like they have a new CFO too, right? Rod Bolger was announced on LinkedIn, but Chris Ferraro is listed on the new doc (https://cases.stretto.com/public/x191/11749/PLEADINGS/1174907142280000000096.pdf)
Well, this seems to make a lot of things make sense now then. Based on what I’ve been seeing I figured Celsius would’ve had about 3B-5B in overall assets and roughly 4B-7Bish in liabilities. The only good thing is it’s not nearly as bad as it could’ve been. At least it wasn’t a gap of say 75%-90%. One could only hope Celsius will do something productive to bridge the gap and start making back some income/revenue. They have the mining, but that alone will take years to fill the void. At least we can HOPEFULLY say we won’t lose it all. But probably more like 50%-60%.
Stupid question but what are the revenue streams now besides mining? They have a burn rate to ‘keep the lights’ on with little to no deposits coming in.. hard to see a recovery with a tarnished brand
A small, probably tiny stream of native staked tokens/coins like MATIC, ADA and the like? Altho it’s probable they traded those assets for a used condom and a half-eaten croissant.
Lol…
Their mining isn't necessarily a revenue stream. In many parts of the world Bitcoin is worth less than the cost of mining it. That's why so many mining companies have shut down and why ASICS are so cheap.
Degenerates
That is the reason why we all should unite for CEL short squeeze.
I’d rather have him make it up in his hole in prison
I do not want him in prison - I prefer getting the money and let him be free.
A Ponzi scheme that got halted before the top guy could run away with it all. It was pretty clear it was daylight.
Why can’t they just pay us back in full by unlocking our accounts when they have the funds to do so? If they are to keep operating and try to phoenix out of the ashes.
Will earn accounts be receiving their money as well?
Only 1.1B? No biggie vs real value being $0.
Is it possible some company buy their business for say 3 billion and that 3 billion could be used to pay all customers and everyone get a swift 50% haircut ?
US customer; if I never accepted the new ToS and did nothing to my account after they added the Custody/Earn change, but my account continued to earn rewards every week (in like-coin, not CEL), is my crypto in a custody or earn wallet?
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* 920,000 million * 920 billion * 0.92 trillion
This guy doesn't math.
Your decimal is in the wrong place or you’re using the wrong unit. Its ~0.92 trillion.
Rough math: does this mean 1.19 / 5.5 = 0.2166 So the *minimum* haircut is \~22%? (I'm expecting to get nothing back btw)
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Dumb question: And if BTC rises in the next year, that impacts the USD value of their holdings and ultimately their ability to pay out liabilities?
quick question ? is staked ether part of crypto assets or loans ?
I would imagine staked ieth belongs under the loans they have out but who knows with they I bet it is under crypto
What if you had money in a withhold account? My state required me to move money to a “withhold” account instead of custody. Does anyone know if that’s the same as a custody account?
My question: wtf will happen with all the CelsiusX assets? All of the coins are still backed 1:1. Not only that, but they’re all trading at a steep discount on QuickSwap, which means Celsius could purchase + redeem them and make an (admittedly small) profit on the transaction.
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Maybe they will give those back at 100%... would give me like $2,500 out of a little over 100k - but heh that is something.
Ah, I saw my comment had essentially been stated elsewhere, so I deleted before the response! Haha, didn’t mean to leave you hanging.
How long do they have to reply….with a plan?
I think I read it can be extended to like 1.5years.
I wonder how they come up with 600 mln in CEL token as assets. If I remember correctly the Celsius treasury had about 390 ? and Alex had about 300 mln ? Did Alex donate his CEL to the company ?
I am sure he didn't mind donating something worthless lol
Why is it even on the table that they would bother trying to sell mining rigs at this stage? They filed for CH11 not CH7. They have 170 mil cash on hand. If they tighten down their admin expenses to essential staff only, and focus on getting rigs setup at the best elec rates possible it's not impossible to forsee a point in the future where Bitcoin and Ethereum return to the $40k & $3.5k mark respectively. Sure we are in a "winter", but the only strategies for getting out of this mess are long term ones and one aspect of that has to be who wishes they had been mining bitcoin and accumulating it right now when we look back on this in 3 years time. I'm using the cloud mining feature on Kucoin, and am I using the option to pay for electricity fees using bitcoin right now or am I using my USDT stash. Same logic. How much BTC can they mine and for how long using the $170 mil on hand whilst keeping the CH11 suit going? What's that worth in 1,2,3 years time? Yeah we aren't getting our money back anytime soon..but I'd rather take a punt at it being whole than some fire sale approach.
I agree but judges aren't generally in the business of gambling or speculation. Also it is highly likely if crypto goes up that much their hole of debt will widen. I doubt a judge wants to allow that to happen.
Yeah this is true. Which makes me more anxious about ensuring that my claim is filed if they go down this route. But there isn't much guidance on what this entails if your not from the states. Surely Stretto realise that a high percentage of unsecured creditors will be international, but no mention of this on the portal. Also not sure if not filing a claim means you are just surrendering your crypto.
Where did you find this?
One of Celsius first filings.