It was detected that Celsius Network had repaid its $120 million loan.
Celsius has repaid a significant portion of its outstanding debt to Maker Protocol since the start of the month.
Crypto analysts see the move as an indication that the flimsy cryptocurrency lending platform was trying to prevent its ultimate collapse amid serious corporate bankruptcy rumors.
JUST IN: Celsius Network has paid an additional $50 million for its #Bitcoins ready. Their liquidation price fell to $8,840.
—Watcher.Guru (@WatcherGuru) July 4, 2022
Celsius, a cryptocurrency lending platform, begins this month with a massive effort to rebuild the strength of its business. Celsius started July by repaying around $150 million in DAI to Maker.
According to FXEmpire, Celsius has repaid nearly $120 million of this debt by returning DAI in three separate batches, consisting of 64 million DAI, 50 million DAI and 6.2 million DAI.
Transactions detected online revealed one payment on July 1 and 3 more payments were made on July 4.
Despite this, the loan memorandum has an outstanding obligation to Maker in the amount of approximately $82 million in DAI.
The DeFi program has recently started incurring losses due to the general bearish trend developing in the market.
The crypto industry seems to have entered a brutal winter season today. Traders and investors have seen massive asset swings, a collective drop in crypto prices, and a drop in a stablecoin.
The protocol’s losses increased as the market became more bearish. Although the Dapp has invested a value of $1.8 billion, it is currently incurring losses equivalent to approximately $654 million.
After extraordinary market conditions produced historic losses on numerous positions, Celsius is one of several top crypto companies that are on the verge of bankruptcy.
On June 13, the company decided to stop withdrawals due to difficult market conditions.
Due to extremely volatile market conditions, Celsius has decided to halt all account withdrawals, trades and transfers until further notice.
According to the company, they did this to put Celsius in a stronger position to honor withdrawal commitments it has made over time.
Subsequently, the company hired new legal counsel to provide advice regarding the restructuring.
Read also: 46,000 Americans Say They Lost Over $1 Billion to Crypto Scams
Find the solvency of Celsius
As reported by CryptoBriefing, large debt repayments like these have the potential to help Celsius regain its solvency and put it in a position where it can allow withdrawals again.
As a result of these refunds, the liquidation price of the company has decreased and the likelihood that the vault will be forced into liquidation has decreased.
Since Celsius invests in a variety of crypto and DeFi contracts in order to earn money for its consumers, these Maker Debts are most likely only a portion of Celsius’ overall liabilities.
On July 1, Celsius said it was continuing to take significant steps to preserve and protect its assets while investigating the many potential opportunities.
Celsius said, “These options include pursuing strategic transactions as well as restructuring our liabilities, among other avenues.”
The company also noted that “these exhaustive explorations are complex and time-consuming, but we want the community to know that our teams work with experts from many different disciplines.”
Furthermore, it has also been reported that despite the tough time the company has been going through, Celsius is still paying out rewards last week. However, users still cannot withdraw them due to liquidity issues.
Related article: YOU MUST BEWARE! Fake copyright infringement emails actually infect devices with LockBit Ransomware