Celsius bankruptcy proceedings show complexities amid fading recovery hopes

Celsius Network's bankruptcy proceedings revealed that the company misrepresented many of its assets with highly complex operations .

The Celsius Network is one of many crypto lending companies that has been wiped out in the wake of the so-called “crypto contagion”.

Celsius' insolvency rumors began circulating in June after the crypto lender was forced to halt withdrawals due to "extreme market conditions" on June 13 and eventually filed for bankruptcy under from chapter 11 a month later, on July 13.

The crypto lending company showed a balance gap of $1.2 billion in its bankruptcy filing, with most of the debt owed to its users. User deposits made up the majority of liabilities at $4.72 billion, while Celsius assets include CEL tokens as assets valued at $600 million, mining assets worth $720 million dollars and $1.75 billion in crypto assets. The value of CEL tokens, however, has drawn suspicion from some members of the crypto community, as the total market capitalization of CEL is only $494 million, according to data from CoinGecko.

Iakov Levin, CEO of centralized and decentralized financial platform Midas, told Cointelegraph that the CEL token's value issue could negatively affect its holders. He explained:

"Celsius calculated a CEL token denominated at $1 per token, demanding that someone be willing to pay that price for the bankrupt token. The situation is grim not only for Celsius users but also for holders of CEL tokens. CEL has become a sad example of how certain events can cause a domino effect, and the broader digital asset market can suffer."

At the time of its bankruptcy filing, the company said it intended to use $167 million in cash to continue certain operations during the restructuring process and said it intended to "restore activity across the platform" and "return value to customers."

A new bankruptcy report filed nearly a month after it filed for Chapter 11 bankruptcy showed the crypto lender's actual debt is more than double what the company showed in July . The report revealed that the company has net liabilities worth $6.6 billion and total assets under management...