Though caught up in the web of the prevailing crypto bear market, Celsius adversely impacted the situation. The crypto lending platform has been struggling to break loose from the effect of insolvency. It suspended customers’ withdrawal from the platform to survive the storm. Also, it had previously hired some lawyers from Akin Gump Strauss Hauer & Feld LLP.
However, Celsius seems to be taking different actions to salvage its sinking boat. The firm has reportedly changed its legal team by hiring new lawyers from Kirkland & Ellis LLP. It got its replacement from the same legal firm that had handled the bankruptcy filing for Voyager Digital last week.
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The Wall Street Journal reported the new action from Celsius on Sunday. Celsius plans to restructure its move with the new legal team through their professional advice. Also, the lending firm would get a bankruptcy filing from its new legal advisers.
Kirkland & Ellis LLP has been a strong international law firm from its inception in 1909. Its operation cuts across several realms such as M&A, private equity, and other transactions in the corporate world.
The law firm handled Voyager Digital’s bankruptcy filing as its general counsel. Kirkland & Ellis LLP filed the proceeding on July 5th for Voyager Digital in the District Court of New York. The legal action came after the lending platform halted activities like withdrawals, deposits, and trading on the grounds of insolvency.
In a new development, Celsius has reportedly taken positive moves to cut down its debts to DeFi lending protocols. The firm has repaid Aave with about 20 million in USD Coin (USDC). The repayment was reported on Sunday through a screenshot from Peckshield, a blockchain company. It was concluded as a transfer to Aave Protocol V2 from the Celsius wallet.
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As the lending platform reduces its debt, it could benefit its depositors by reclaiming their funds. Joni Pirovich, a crypto lawyer, stated last week that Celsius’s loan repayment moves are highly beneficial.
It would assist the firm in freeing up most of its capital or collateral, which would support customers’ withdrawal needs. Since June 13, the firm has suspended all withdrawals on its platform to evade loss of funds if it goes bankrupt.
Recall that Celsius gathered collateral worth over $500 million in Wrapped Bitcoin (wBTC). This occurred on Thursday last week after its debt repayment to MakerDAO of about $41.2 million. With this latest repayment to Aave, Celsius is getting closer to clearing off its entire debts.
According to Zapper, a DeFi tracking firm, Celsius now has a total of $215 million in its debts. The breakdown reveals that it still owes Aave about $82,500 in REN and $130 million in USDC. Also, it owes Compound protocol about $85.2 million in DAI.
Featured image from Pexels, chart from TradingView.com
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