Battered Celsius Network pays off $20M in AAVE debts

Key Takeaways

  • Celsius paid 20 million USDC for its AAVE loan.
  • Total debt stands at $215 million.
  • Earlier Celsius paid off over $220 million in a week. 

The battered crypto lender Celsius is rushing to pay off its outstanding debt and save itself from going bankrupt. On July 7 the crypto lender closed its outstanding Maker loan of 41.23 million DAI, paying off over $220 million in a week. Following this, Celsius moved almost $500 million worth of wrapped BTC to FTX.

According to recent reports, Celsius on Sunday paid off 20 million USDC for its AAVE loan. Peckshield brought the news public by sharing a screenshot of the 20 million USDC transfer from a Celsius wallet to AAVE Protocol v2.

Along with $85.2 million in Dai debt (DAI) to the Compound protocol, Celsius’ total debt stands at $215 million, which has reduced from $258 million on July 7. The outstanding AAVE debt is $130 million worth USDC and $80,000 worth REN. Currently, REN is trading at $0.1312.

The outstanding Compound debt which Celsius has started paying off is $85 million in DAI. The crypto lender further has a $3 million fUSDC loan from Notional Finance, which is slated to be repaid by September 25.

The latest developments come amid reports that Celsius now hired Kirkland & Ellis LLP, the law firm Voyager Digital hired for its bankruptcy filing. This development is hinting at Celsius opting for a potential restructuring or bankruptcy filing. Last week, Voyager filed for Chapter 11 bankruptcy protections in New York.

Many crypto analyst Celsius repaying its loan position and withdrawing collateral could improve the situation of its customers. According to fundstrat analyst Walter Teng, by repaying the debt, Celsius is possibly freeing up collateral that later can be sold on centralized exchanges or via over-the-counter to meet customer demands 

The debt repayments come as a huge relief for Celsius’ 1.7 million users, who have not been able to access their crypto funds since operations were halted on June 13. Celsius currently faces allegations of running a Ponzi scheme by former employee Key Stone. KeyFi has filed a lawsuit against Celsius for allegedly using customer deposits to inflate its CEL token prices and for manipulating the broader crypto market.

Saniya Raahath
Saniya Raahath

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