Here are some updates on the current situation of 3AC and Celsius:
3AC:
- Court documents from Singapore have revealed the 3AC creditor list, with Digital Currency Group, the operator of the brokerage Genesis, filing a USD 1.2 billion claim.
- According to the Digital Currency Group, “both the DCG and Genesis balance sheets remain strong.” The firm stated that it had “no remaining exposure” to 3AC and that Genesis “continues to be well-capitalized.”
- Other 3AC creditors include DRB Panama, the operator of the crypto exchange Deribit, which lent 3AC bitcoin (BTC) 1,300 and ethereum (ETH) 15,000, all worth approximately $51 million at the time of writing.
- Voyager Digital, CoinList, DeFiance Capital, and FalconX are some other creditors that have been affected when 3AC went bankrupt. Voyager lent 3AC $685 million in BTC and ETH and has now filed for bankruptcy. Falcon X and CoinList both denied that they were in financial trouble as a result of their exposure to 3AC.
- CoinList claims that 3AC’s “default doesn’t affect any user funds, only assets from our own balance sheet,” while FalconX boasts that its “balance sheet is the largest it has ever been.” CoinList also added that it had “raised a USD 100 million Series A [funding round] in October 2021,” and “has years of runway.”
- 3AC’s founders and their spouses also filed claims: Chen Kaili Kelly, the wife of co-founder Kyle Davies, filed a claim of some USD 66 million, while co-founder Zhu Su filed a USD 5 million claim.
- Nobody knows where Zhu and Davies are right now, but they both attended a Zoom call during the online liquidation proceedings, albeit with their cameras turned off and microphones muted.
- Meanwhile, at 7:31 UTC on Tuesday morning, BTC was trading at USD 21,788, down 1% from the previous day and 2% from the previous week. At the same time, ETH is down 1.1% in 24 hours and up over 4% in 7 days, changing hands at USD 1,515.
Celsius
- During its own bankruptcy hearing, lawyers for Celsius revealed that the company owes more than USD 5 billion to half a million creditors. Proceedings got underway yesterday, with advocates representing the firm submitting a detailed document on the company’s financial situation to the court.
- The company has filed for “reorganisation bankruptcy,” which is a bid to temporarily halt civil cases from creditors, giving the company the breathing space it needs to reorganise its finances and finally repay debts.
- Celsius’ lead attorney, Pat Nash, has effectively asked creditors to take a long-term view and wait for market prices to recover. He explained that the company’s mining arm is currently minting 14.2 BTC per day and is looking to expand its operations.
- Nash stated that “The vast majority of our customers are going to be interested in riding out this crypto winter, remaining long crypto, having the opportunity to realize their recovery through an appreciation in the crypto macro environment.”
- Celsius’ assets do not amount to much: The company has USD 170 million in fiat holdings, is owed USD 620 million, but has USD 720 million in mining hardware, much of which has fallen in price of late. It has USD 450 million worth of “other” assets, as well as considerable amounts of its own CEL coin.
- In a section named “key legal questions,” the lawyers wrote, ominously perhaps for Celsius customers who are still unable to withdraw their funds: “Are the crypto assets in Celsius’ possession property of the estate? What does it mean to unimpair a crypto claim or to pay a crypto claim in full?” They also pondered, “Are customers entitled to a return of cryptocurrency in kind?”
- According to legal experts on Twitter, the company may try to prove that Celsius is not legally obliged to return funds to its Earn customers. “Celsius says that anyone in the EARN programme has no crypto that belongs to them (i.e., stop thinking of it as *your* crypto,” wrote lawyer David Silver. “Celsius is the owner of the crypto assets. Most of the assets in Celsius came in through the Earn program and [are] part of the [Celsius] estate.”
- Meanwhile, CEL was trading at USD 0.793 at 7:31 UTC on Tuesday morning, up nearly 12% in a week.