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July 18, 2022

US-Based Lending Firm Owes $439,000,000 to Embattled Crypto Firm Celsius: Report

By Daily Hodl Staff

A troubled crypto brokerage that recently filed for bankruptcy says they are owed hundreds of millions of dollars by a US-based private lending firm.

According to a new report by the Financial Times (FT), Alex Mashinsky, the chief executive officer of Celsius Network, said in a court filing on Thursday that an unnamed lending service owes them $439 million.

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Sources familiar with the situation tells FT that Mashinksy is referring to EquitiesFirst, a firm known for lending cash to executives with their stocks as collateral.

The report says that the money owed to Celsius by EquitiesFirst is a “significant chunk” that hundreds of thousands of Celsius customers are relying on to recover at least a portion of their savings.

As stated by EquitiesFirst to FT,

“EquitiesFirst is in ongoing conversation with our client and both parties have agreed to extend our obligations.”

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FT says the court filings show that Celsius’ dealings with EquitiesFirst began in 2019 when the crypto lender borrowed from them on a secured basis.

Two years later, when Celsius repaid their loan, EquitiesFirst was unable to hand back the capital “on a timely basis,” effectively flipping the borrower-lender relationship between the two companies.

EquitiesFirst’s outstanding debt to Celsius is made up of $361 million in cash and 3,765 Bitcoin (BTC), worth over $80.2 million, and is currently being paid at a rate of $5 million per month, according to the report.

Recently, Celsius filed for Chapter 11 bankruptcy after its native crypto asset plummeted by over 99% due to the lending platform halting customer withdrawals.

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Featured Image: Shutterstock/CaptainMCity

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