In three transactions over the past day, Celsius Network paid off $120 million of its debt to the Ethereum-based DeFi lending protocol Maker.
Notably, the lending platform, which is facing a serious liquidity problem, had borrowed hundreds of millions from Maker using wrapped Bitcoin (WBTC) as collateral. By reducing its Maker debt, Celsius Network has reduced the chance of a loan position going into liquidation. When traders are unable to pay back their loans on time, the protocols of decentralized finance automatically conduct liquidation by selling their collateralized assets.
Given concerns about the platform’s solvency and larger worries about the solvency across the crypto industry, particularly centralised lenders amid a decrease in the values of major digital assets, Celsius Network’s recent activities are noteworthy. The announcement by Celsius that it would stop allowing withdrawals from its platform intensified those worries.
Celsius Network is facing serious troubles
Recent declines in the price of bitcoin increased the likelihood that Celsius would go out of operation. Just two days after withdrawal suspension, Celsius Network hired restructuring lawyers, as TheCoinRise reported. Moreover, as per the various reports, the company has onboarded advisors to file for potential bankruptcy. The news worked as a catalyst in the massive panic situation with enraged crypto YouTuber and influencer Ben Armstrong taking a class-action lawsuit against the company.
According to data from DeFiExplore, the repayment has assisted in lowering the liquidation price on its WBTC collateral to less than $5,000.
According to on-chain data, Celsius Network has complex commitments and manages collateralized loans across several lending protocols. The company still owes Maker $82 million, Compound $100 million, and Aave $175 million.
As per the recent development, Celsius Network has joined the list of companies laying off their employees. It has decided to trim off 150 workers from their positions.
