The Bank of the Future (BF) has determined that should the prices of Bitcoin (BTC) and Ether (ETH) double from their present values, Celsius will be fully capable of repaying all its outstanding claims while retaining its other assets.
In May 2023, Celsius finalized an agreement with Fahrenheit Group, the winning bidder for the acquisition of its assets. These assets include $450 million in liquid cryptocurrency, along with mining operations, institutional loans, and investments amounting to approximately $1.4 billion.
By the bank calculations, if BTC reaches $54,879 and ETH reaches $3,750, Celsius could clear its debts. The calculations are based on the assumption that Celsius would sell its BTC and ETH holdings at the doubled prices.
The Bank of Futures also compared the two wind-down programs that Celsius is considering: the Orderly Wind Down and the Fahrenheit Plan. Its calculations suggest that both alternatives would yield a recovery rate of around 65%, which could potentially rise to about 75% if 10% of claims remain unpaid.
Simon Dixon, founder of Bank of Futures, shared these findings on Twitter on July 19, 2023. He emphasized the need for Celsius creditors to be prepared for the possibility of bankruptcy and actively work towards avoiding it by the end of 2023 or when BTC and ETH prices hit the projected targets.
It is very important that we get out of Chapter 11 before #Bitcoin & $ETH approach these numbers to avoid another rug pull that we will need to fight hard against if it comes up.
Estimation of the price of #BTC and $ETH (50/50 basis) at which claims may be paid in full: $BTC… pic.twitter.com/PITQV3pIGM
— Simon Dixon (@SimonDixonTwitt) July 19, 2023
Dixon also highlighted the importance of vigilance to prevent potential fraudulent activities. He urged the stakeholders to remain cautious and take a stand against any sudden losses or deceitful actions that may arise.
Meanwhile, Celsius is under investigation by the United States Securities and Exchange Commission (SEC) for the alleged sale of unregistered Bitcoin securities. On July 13, 2023, the U.S. SEC filed a lawsuit against Celsius and its CEO, Alex Mashinsky. Mashinsky was arrested the same day but was later released on a $40 million personal recognizance bond on July 14.
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