It was detected that Celsius Network had repaid its $120 million loan.
Celsius has repaid a substantial amount of its outstanding debt to Maker Protocol since the beginning of the month.
Crypto analysts see this move as an indication that the shaky cryptocurrency lending platform was attempting to prevent its ultimate collapse in the face of serious rumors of the company going bankrupt.
JUST IN: Celsius Network has paid off another $50 million towards its #Bitcoin loan. Their liquidation price has dropped to $8,840.
— Watcher.Guru (@WatcherGuru) July 4, 2022
Celsius Pays Back
Celsius, a cryptocurrency lending platform, is starting this month with a massive effort to rebuild the strength of its company. Celsius began the month of July by repaying approximately $150 million worth of DAI to Maker.
According to FXEmpire, Celsius has repaid almost $120 million of this debt by sending back DAI in three separate batches, consisting of 64 million DAI, 50 million DAI, and 6.2 million DAI.
The transactions detected online revealed one payment on July 1 and 3 more payments were made on July 4.
Despite this, the lending protocol has an outstanding obligation to Maker in the amount of around $82 million worth of DAI.
The DeFi program has recently started experiencing losses as a result of the general bearish trend that has been developing in the market.
The crypto industry nowadays seems to have entered a brutal crypto winter season. Traders and investors experienced massive fluctuations in assets, a collective plunge in crypto prices, and a fall of a stablecoin.
The protocol's losses increased as the market became more bearish. Despite the Dapp having a value of $1.8 billion invested in it, it is currently suffering losses that are equivalent to roughly $654 million.
After extraordinary market conditions produced historic losses across many positions, Celsius is one of several crypto blue-chip enterprises that are on the verge of going bankrupt.
On June 13, the company decided to halt withdrawals as a result of the harsh market conditions.
As a result of the extremely volatile market conditions, Celsius has decided to stop all withdrawals, swaps, and account transfers until further notice.
According to the company, they did that to put Celsius in a stronger position to honor the withdrawal commitments it has made over the course of time.
Subsequently, the company hired new legal counsel to provide advice regarding the restructuring.
Regaining the Solvency of Celsius
As reported by CryptoBriefing, large debt repayments like these have the potential to assist Celsius in regaining solvency and put it in a position where it can once again enable withdrawals.
As a result of these repayments, the liquidation price of the company has decreased, and the likelihood of the vault being forced to liquidate has decreased.
Since Celsius invests in a variety of crypto and DeFi contracts in order to earn cash for its consumers, these Maker debts most likely constitute just one part of Celsius' overall commitments.
On July 1, Celsius stated that they are continuing to take significant measures to preserve and protect their assets while also investigating the many potential possibilities.
Celsius said, "These options include pursuing strategic transactions as well as a restructuring of our liabilities, among other avenues."
The company also noted that, "These exhaustive explorations are complex and take time, but we want the community to know that our teams are working with experts from many different disciplines."
Furthermore, it was also reported that despite the rough patch the company went through, Celsius was still paying out rewards as of last week. However, users are still unable to withdraw them due to liquidity problems.
