Celsius Network bets on Bitcoin mining to get out of trouble

Celsius Network, a crypto lending firm besieged by financial difficulties, says bitcoin mining is critical to its restructuring efforts. This US firm has been allowed by a bankruptcy court to spend approximately $41.2 million on a bitcoin mining center.

Celsius Network lawyer Patrick Nash told Glenn that the firm could find a way to pay customers through bitcoin mining. The assets of its customers were frozen before bankruptcy filing. He said that the value of the mining business can increase when the crypto market recovers. As Reuters reports, the firm filed a bankruptcy filing last week. It has a loss of about $1.19 billion. About two months ago, the massive fall in TerraUSD and Luna caused a huge selloff in the crypto market and took a toll on the firm’s lending business. Thereafter, the firm closed the transactions of the customers to rein in the losses.

The firm’s decision to freeze transactions is being investigated by some regulators, including the Texas State Security Board. In this regard, the US Securities and Exchange Commission (SEC) had also sought information from Celsius. However, the SEC declined to comment. Joseph Borg, director of the Alabama Securities Commission, said, “I am concerned that the firm’s clients, including retail investors, may need to redeem their assets but they may. This could add to their financial difficulties.”

The firm said in a blog post, “We are taking these necessary steps to strengthen liquidity and business. In addition, measures are being taken to protect the assets. Customers will continue to get rewards during this time.” At the end of last year, the firm had secured funding of about $750 million. It is one of the largest firms involved in crypto lending. It offers interest to its customers depositing its cryptocurrencies and lending cryptocurrencies to earn returns. Scrutiny of the crypto segment has increased especially in many countries including the US.

(This news has not been edited by NDTV team. It has been published directly from Syndicate feed.)

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