FTX Cancels Celsius Deal After $2B Shortfall in Balance Sheet
2022.07.01 10:06
FTX Cancels Celsius Deal After $2B Shortfall in Balance Sheet
- FTX canceled a deal with Celsius Network after looking at its finances and seeing a $2 billion hole.
- Since the 12th of June, Celsius has not made any withdrawals and has been silent since the 19th of June.
- Sam Bankman-Fried, the developer of FTX, has voiced concern that certain exchanges are “secretly insolvent” and may soon close.
According to two sources of The Block that have knowledge of the aborted transaction between FTX and Celsius, FTX was interested in a plan to gain control of Celsius but walked away after evaluating the finances of the company. According to one of the sources, Celsius’s financial statement allegedly has a two billion dollar shortfall in its balance sheet.
After initially contemplating the supply of financial assistance or an outright takeover, the cryptocurrency exchange discovered that the firm was tough to work with. As a result of this, FTX found it impossible to acquire the company.
In May, Celsius reported having 1.7 million users and around $12 billion in assets under management. However, the company has halted withdrawals since June 12 and has been quiet since June 19.
In similar developments, Sam Bankman-Fried, the creator of the widely used exchange FTX, recently gave an interview in which he expressed concern that some cryptocurrency exchanges are “secretly insolvent” and may soon go out of business.
BlockFi and Voyager Digital have already received assistance from Bankman-Fried’s FTX and Alameda Research. The 30-year-old millionaire argues that sometimes you just have to do what it takes to kind of stabilize things and safeguard consumers.
Furthermore, the FTX may yet choose to make a significant purchase, with the company having an interest in Celsius’ competitor BlockFi. Following the provision of a $250 million revolving fund by FTX to BlockFi, two companies are now negotiating the terms of a potential business transaction.
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