Celsius' bankruptcy filing shows a $1.2B gap in balance sheet

Cryptocurrency company Celsius Network, which filed for bankruptcy in a New York court, has a $1.2 billion discrepancy on its balance sheet, the filings revealed.

According to the filing seen by CoinDesk, Celsius has $4.31 billion in assets and $5.5 billion in liabilities. However, the company has not clarified the nearly $1.2 billion deficit.

In its list of assets, Celsius claimed it has about $600 million in its CEL token. However, it noted in the filing the total market cap for CEL was roughly $170.3 million as of July 12.

Celsius's business has been in trouble since it suspended all customer withdrawals earlier this year after cryptocurrencies LUNA and Terra crashed.

Earlier this month, a former Celsius investment manager in a lawsuit said he was due millions of dollars in back pay, and the company was running a Ponzi scheme with new customer deposits.

The manager added that he saw an accounting gap of $200 to $300 million in Celsius' books while he worked with the company. He claims this gap was due to the company filing crypto receivables as dollar receivables, with the collapsing crypto market creating the difference.

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According to reports, Celsius is working hard to make its business viable since the initial announcement to suspend withdrawals in June.

While a potential buyout offer from crypto exchange FTX was scratched due to the balance sheet black hole,

Celsius paid off the loans taken from decentralised finance (Defi) entities Aave ($235 million), Compound ($258 million), and Maker ($223 million) earlier this month.

It made these payouts to regain control of all its assets and maintain a chance of not having to dissolve the company. If successful, this would be the first reported example of a crypto entity filing for bankruptcy, but aiming for reorganisation instead of liquidation.