Cryptocurrency News

Celsius Continues Paying Off Its Debts, Sends 20M USDC to DeFi Protocol Aave

By July 11, 2022 No Comments
Celsius (CEL) crypto lender

Key takeaways:

  • Cryptocurrency lender Celsius has repaid 20M USDC to Ethereum-based trading protocol Aave
  • The company has been paying off its debts at an expedited rate after pausing user withdrawals last month
  • Celsius has hired a new legal team as rumors of a potential bankruptcy continue to swirl

The crypto lender still owes 130 million USDC to Aave

Celsius (CEL), a struggling cryptocurrency lending platform, has paid off 20 million USDC debt to decentralized finance (DeFi) protocol Aave (AAVE). Recall that Celsius paused withdrawals last month to protect itself from potential bankruptcy stemming from the broader cryptocurrency downturn and the drastic increase in user withdrawals.

Per data from blockchain analytics site Zapper, Celsius still owes 130 million USDC and 597,123 REN to Aave. PeckShield, a leading blockchain security company, shared a screenshot of the 20M USDC transaction on Twitter.

In addition to the roughly $130 million it owes to Aave, the crypto lender has an outstanding debt position of roughly 85 million DAI on lending and borrowing protocol Compound (COMP).

Per DeFi Explore, the troubled crypto lending platform paid off its remaining 41.2 million DAI debt to DeFi protocol Maker (MKR) on July 7. This allowed the company to regain access to 21,972 WBTC it used as collateral to secure the stablecoin loan. 

CEL is up 50% in the past month despite Celsius’ liquidity problems

When looking at the historic data, the extent of risky investment decisions made by Celsius becomes more than apparent. For instance, the company barely avoided liquidation of its 15,553 WBTC it used as collateral to borrow 329 million DAI on May 9, which was the day Terra’s UST de-pegged and caused a severe drop in the value of all digital assets. At the time, Bitcoin was trading at $32,750 while Celsius’ liquidation price was $30,714. 

Cointelegraph reported today that Celsius hired Kirkland & Ellis LLP as its new legal counsel. The legal team has also been working with Voyager Digital, helping the crypto trading platform manage the restructuring process and the bankruptcy procedure.

Despite rumors of potential bankruptcy dating back to late June, Celsius’ native CEL token has been experiencing significant positive price activity as of late. The token is up more than 50% in the past month and is trading at roughly $0.82 at the time of writing. Going by our algorithmically generated price predictions, CEL could see a substantial rally in the coming days.