Celsius Network has repaid partial debts to decentralized finance and lending platforms Aave and Compound respectively, as it continues to tackle the potential insolvency issue.
According to tracker Etherscan, the crypto lender repaid $78.1 million worth of USDC stablecoin to Aave and $35 million worth of stablecoin DAI on the platform Compound.
The Block reported that Celsius also withdrew 6,083 wrapped bitcoin (worth approximately $124 million) from Aave and transferred them to an Ethereum address known to interact with centralized exchanges regularly.
The Block also added that the fund transfer to Aave was made in four transactions. It further reported that the crypto lender has cleared its debt last week on MakerDAO before withdrawing $440 million in wrapped bitcoin.
The crypto firm has started clearing debts to free up its collateral in decentralized-finance applications.
However, the troubled crypto firm still owes $72 million in USDC to Aave and $50 million in DAI to Compound, according to on-chain data gathered from its wallets.
While data from Nansen and Etherscan data showed that digital wallets belonging to Celsius paid back more than $300 million worth of debt to various platforms since July 1, 2020.
Celsius has frozen withdrawals since the beginning of the recent market downturn in June, while other crypto firms, Voyager Digital Ltd. and Three Arrows Capital, recently filed for bankruptcy.
Celsius had positioned itself in the market by promising more than 18% in interest to peoples’ holdings who gave it their digital coins. The crypto lender, in turn, lent those coins out, Bloomberg reported.
Besides clearing debts, the crypto lender has also started the restructuring process.
Celsius has hired new lawyers to advise the troubled cryptocurrency lender on restructuring, according to a report from the Wall Street Journal (WSJ).
The much-needed restructuring plan has come as it seeks to escape the recent turmoil in crypto markets, the WSJ said, citing people familiar with the matter.
According to the WSJ report, Kirkland & Ellis LLP lawyers have been called on board to advise Celsius on options, including a bankruptcy filing.
The lawyers have replaced the company’s previous lead restructuring counsel, Akin Gump Strauss Hauer & Feld LLP.
Since the company’s stagnation due to the market plunge, it has been in an unstable liquidity position. As part of its recovery efforts, Celsius has also appointed Citigroup to advise it on potential financing options.
The WSJ reported that Celsius is also reshuffling its board as they appointed two new directors last week.
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