Celsius Debt Lower to Around USD 120M

Celsius doesn’t seem to be about to be frozen out of the crypto world. At the same time, it continues to take measures to avoid possible insolvency. The firm hastily repays its debts. Data from Blockchain Analytics shows that Celsius recently paid $78.1 million worth of USD coins using Aave lending protocol in a series of transactions. Etherscan data showed that one payment made to Aave on July 11 was more than $20 million. Celsius also paid $35 million worth of USD-pegged DAI tokens to the Compound protocol.

Celsius launched a series of payments earlier this month. The firm still has about $120 million in debt. It should pay on both Compound and Aave, according to Zapper stats. However, it released millions worth of tokens such as collecting bitcoin as collateral. Last week, Celsius added $500 million in WBTC to the FTX exchange, shortly after returning the $450 million token as collateral.

The troubled crypto lender didn’t indicate a debt repayment strategy. However, it seems to want to avoid the consequences of forced liquidations. Many loan deals use crypto as collateral. If the value of the coin falls below a certain amount, the position is automatically late. By doing so, Celsius could effectively default on its debts and thus file for bankruptcy. However, at the moment, the sources of financing for repayment of the loans are unclear.

Celsius and Crypto

The expectation is that Celsius would return to normal after a month’s delay. However, investors will still keep their money. Celsius suspended withdrawals in June. As a result, many customers were unable to access their funds. Also, the crypto lender reorganized its corporate structure against the backdrop of layoffs and difficult management changes. CEL is 112th by market capitalization and trades at $0.733; decreases by 6% per day and by 32% per week. While it is up 88% in one month, CEL is also down 88% in a year.

Regulator Signals

The Financial Stability Board hinted that it will soon propose regulation of cryptocurrencies and other digital assets. This will subject them to the same rules that apply to traditional financial instruments. Information about the council’s intentions appeared in a statement released on Monday. The document does not highlight its features it characterizes crypto markets as a warning of internal instability and structural vulnerability that their connections to other crypto-assets and the traditional financial system pose a significant risk to everyone.

An effective regulatory framework should ensure that crypto-asset activities, which present risks to traditional financial activities are subject to the same regulatory consequences, having the new characteristics of crypto-assets. as well as taking advantage of the potential benefits of the technology behind them.

Stablecoins, which seek to peg their value to fiat currency, produce the strongest language in the document. Stablecoin is in the main system of financial system and is widely popular as a means of payment. It is also a store of value in multiple jurisdictions. This could pose significant risks to financial stability in the absence of adequate regulation.

Conclusion

Such a stablecoin must be held to high regulatory and transparency standards. It should always maintain reserves that maintain value stability and conform to relevant international standards. Practices that TerraUSD tried to implement by complex connections with other cryptocurrencies before the collapse and billions of loss. Therefore, the document requires strong regulations and supervision by relevant authorities if they accept it as a widely famous means of payment or otherwise play an important role in the financial system.

The document suggests that the regulations protect the same activity with the exact regulation and risk. Rules for crypto-assets should check to conventional financial instruments. The council also urges all crypto operators to follow the law of the land. It also expects the Member States to enforce this requirement.

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