Embattled crypto lender Celsius Network is on track to run out of cash by October, according to the firm’s latest Chapter 11 filings.
In an August 14 filing with the US Bankruptcy Court in the Southern District of New York, Celsius highlighted that it is expected to reach negative liquidity by October 2022 at approximately $34 million.
The lending platform, trusted by many around the world with life savings and pension funds, was revealed to be in a much worse financial position than originally suggested in July.
Court documents revealed this week that Celsius’ three-month cash flow forecast, which shows sharply declining liquidity, indicates the company will experience a roughly 80% drop in liquid assets from August to September.
The forecast predicts that Celsius will continue to report a negative cash flow and, by October, run out of cash. Over the next three months, the company is expected to accumulate negative net cash flow of $137.2 million.
Previous court documents revealed that Celsius “operates one of the largest mining operations in the United States” and before filing for bankruptcy, had expansion plans to “mine Bitcoin by acquiring and commissioning additional mining rigs.”
Last week, a lot of people got really upset with me, as I said @CelsiusNetwork would run out of money and solutions would have to be acted upon more quickly. I was told that I don’t understand Chapter 11. They have now confirmed that they will run out of money by October. https://t.co/CyzjgKpId7 pic.twitter.com/vBIRIGEmG2
— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) 15 August 2022
These findings come after Reuters reported last month that the struggling crypto-lending platform was approved by US Bankruptcy Judge Martin Glenn to build a new Bitcoin mining facility using existing funds up to $3.7 million, with an additional $1.5 million approved to be applied to “duties and duties on imported Bitcoin mining rigs.”
The document stated that Celsius mines approximately 14.2 BTC per day, and owns 80,850 mining rigs, of which 43,632 were in operation. Despite the alarming numbers that their cash flow forecast suggests, the amount of Bitcoin the company predicts it will mine each year is more promising. After mining a total of 3,114 BTC in 2021, Celsius projected mining of more than 10,100 BTC in 2022, with a steady increase to 15,000 BTC in 2023.
Despite Celsius continuing its mining activities, it has stopped monetizing the Bitcoin generated by filing Chapter 11 petitions, with the company now “financially constrained.”
Celsius has yet to publish a monthly statement on its website. The latest statement the company released on July 13 was a revelation that its “strong and experienced team” had voluntarily filed for a Chapter 11. The company kept the serious news positive, reasoning that it is “giving the company the opportunity to stabilize its business” to “maximize value for all stakeholders.”
The reaction on social media has been mixed, and some people on Twitter remain hopeful that the Celsius recovery plan “will be very attractive” to users and others suggesting that the price of CEL could take a hit $100. Some firmly believe that Celsius can recover, despite what the cash flow suggests one user states that Celsius earns $8.5 million monthly from Bitcoin, adding that Celsius will “come back stronger.”
Related: The Celsius Network coin report shows a balance gap of $2.85 billion
With many speculating on the future of Celsius and potential buyers, Reuters reported last week that Ripple Labs is “interested in potentially buying assets of bankrupt crypto-lender Celsius Networks.”
Cointelegraph reached out to Ripple Labs to get proof of the claims. However, Ripple Labs only confirmed earlier reports, noting that the company is “interested in learning about Celsius and its assets and whether any may be relevant to our business.”
While Ripple Labs did not disclose whether it would be acquiring Celsius, the company highlighted the fact that it “has continued to grow exponentially through a market reset and is actively looking for mergers and acquisition opportunities to strategically scale the company.”
Goldman Sachs is reportedly “considering” helping an investor raise the necessary capital to buy the digital assets tied to the struggling lender, according to a June 24 article.
However, a source emphasized that Goldman does not intend to own the digital assets, but rather to act on behalf of the investor as a broker.