Crypto lender Celsius Network announced that it has received several cash-injection offers as it tries to stay afloat during the bankruptcy process. The company had revealed on Monday that it was low on cash. Additionally, a judge has given Celsius approval to sell the bitcoin it mines to provide additional support during the process.
Celsius Reveals Cash-Injection Offers
According to CoinDesk, Celsius attorney Josh Sussberg disclosed on Tuesday during a bankruptcy hearing that the crypto lender had received several proposals to inject cash into it. However, he did not reveal the sizes of those offers.
Sussberg added that it was "mission critical" for them to move quickly on those proposals. It's common for companies going through a bankruptcy restructuring to secure financing to keep things up and running.
Celsius filed for bankruptcy protection earlier this year after plummeting cryptocurrency prices caused it to pause withdrawals from its platform. Financial projections included in a court filing on Monday revealed that the crypto lender would run out of cash by October. Celsius is short $2.8 billion in what it owes to depositors.
Before it filed for bankruptcy, the company had partially funded its operations by selling the bitcoin it mined. The judge in the case approved that process to continue. A court filing before Tuesday's hearing showed that Celsius Network had mined $8.7 million worth of bitcoin last month, but its capital and operational costs are more than that.
Celsius Chief Took Control Of Celsius' Trading Strategy Ahead Of Bankruptcy
Meanwhile, more details on what led up to the crypto broker's bankruptcy filing are coming out. Sources familiar with the matter reportedly told the Financial Times that Celsius founder and CEO Alex Mashinsky took control over the company's trading strategy leading up to a Federal Reserve meeting.
At the time, the prices of the most popular cryptocurrencies were plunging from their record highs. Mashinsky reportedly told his investment team that Celsius had to protect itself from continuing declines in crypto prices. He was convinced that a hawkish outcome could tank crypto prices.
Sources told the Financial Times that in the days leading up to the Fed meeting, Mashinsky himself directed individual trades of cryptocurrency, overruling executives who had decades of experience in finance.
In one case, the Celsius chief reportedly ordered that hundreds of millions of dollars' worth of bitcoin be sold without waiting to double-check the company's information on its own holdings, which was said to be "often unreliable." At the time, the crypto broker was holding $22 billion worth of crypto assets for its customers. It then bought all that bitcoin back the next day at a loss.