Celsius Pays Off Final Debt to Aave, but Vermont Regulator Warns of Insolvency
One month ago, Celsius reportedly owed Aave $303 million. Now, it appears as though that loan has been settled. According to on-chain data, Celsius Network transferred $63 million in USDC to pay off debt to Aave on Tuesday, and an additional 8 million in USDC in a separate transaction. As a result, Celsius unlocked $26 million worth of collateral, which was comprised of three different digital assets.
Celsius Closes Debt to Aave, Moves $417M Worth of stETH
According to on-chain data, $8.4 million worth of USDC was transferred Tuesday from Celsius’s wallet to Aave. This closed Celsius’s debt to the DeFi protocol and allowed the crypto lender to reclaim its pledged tokens as collateral.
The remaining pledged collateral against the loan included $10 million in Ether derivative stETH, $13 million in LINK, and $3 million in SNX. The total value represents roughly $26 million, which is the final slice of the original $600 million worth of collateral posted by Celsius.
While the move closed Celsius’s USDC debt to Aave, the company still owes more than $71,800 in REN and $50.3 million in DAI to decentralized protocol Compound. Celsius also recently paid off $183.6 million in debt to MakerDAO. Data shows that Celsius’s latest repayment trimmed its locked-up collateral from more than $650 million to $211.3 million.
After reclaiming its tokens, the crypto lender has moved $418 million worth of its publicly known staked stETH holdings to an unidentified wallet. It is believed that this move is not directly related to Celsius paying off its loan from Aave.
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Vermont Financial Watchdog Says Celsius is ‘Deeply Insolvent’
The Vermont Department of Financial Regulation (DFR) said Tuesday that Celsius “is deeply insolvent” as the crypto lending firm does not have enough assets and liquidity to fulfill its obligations to customers and creditors. Per a report from the regulatory watchdog:
“Celsius deployed customer assets in a variety of risky and illiquid investments, trading, and lending activities. Celsius compounded these risks by using customer assets as collateral for additional borrowing to pursue leveraged investment strategies.”–Vermont Department of Financial Regulation
The state agency also believes that Celsius took part in “an unregistered securities offering” by providing crypto interest accounts to investors. In addition, the crypto lender operates without a money transmitter license, the DFR added, which suggests that the company has been working without regulatory oversight for the most part.
DFR’s criticism marks yet another headwind for Celsius after the crypto lender had to face a myriad of challenges in the recent crypto market drawdown. Last month, the company halted withdrawals, announced layoffs, and brought in restructuring professionals to help resolve its financial issues.
Celsius is already being investigated in multiple states, with the DFR being the latest regulator to launch a probe into the crypto loan company. The platform’s reputation has sunk, particularly since Sam Bankman-Fried, the CEO of FTX, decided to not pursue financial assistance to Celsius, citing a $2 billion hole in the company’s balance sheet as the reason.
Earlier this year, the US SEC had ‘conversations’ with Celsius, which resulted in Celsius’ flagship product, Earn, becoming unavailable to unaccredited investors in the US.
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