In 24 hours, the Celsius Network token (CEL) rose by 58.7%, according to data from CoinGecko.
On June 13, Celsius suspended withdrawals, trading and transfers between accounts due to extreme market conditions.
Against this background, the CEL token collapsed from around $0.475 to $0.09. At the time of writing, quotes for the asset were around $0.53.
An analyst using the pseudonym DeFiyst noted that the Celsius team is strengthening its debt positions in three main areas.
1/10 Celsius on-chain positioning update🧵
TL;DR: Significantly healthier.
Celsius continue to find more shekels, adding to their collateral across the board for 3 main positions:
1) Maker wBTC Vault now has a liquidation price of $14k, having paid down more of their DAI debt pic.twitter.com/UWBB1BUgAC
— DeFiyst (@DeFiyst) June 14, 2022
In MakerDAO, by increasing the collateral, the platform raised the liquidation price of the vault to $14,000 per wBTC. Celsius also boosted ETH collateral on its tokenized stETH assets in the Aave protocol and repaid a debt of $2.4 million USDC.
The expert noted the platform’s sizable positions in Compound: 14,000 BTC and 87,000 ETH (about $420 million in total). Centralised crypto-lending services accounted for 47% of all borrowed DAI in the DeFi protocol and 25% of USDC, DeFiyst said.
According to The Wall Street Journal, amid Celsius’s problems the firm hired lawyers from Akin Gump Strauss Hauer & Feld for possible financial restructuring. However, the platform is initially seeking ‘potential options for raising capital from investors’, the publication’s sources said.
“Celsius is moving as quickly as possible and will share information as needed. Acting in the interests of the community remains our top priority,” the team said.
.@CelsiusNetwork is working as quickly as possible and will share information as and when it becomes appropriate. Acting in the interest of our community remains our top priority.
— Celsius (@CelsiusNetwork) June 14, 2022
As noted, CEL’s decline coincided with a broader rout in the cryptocurrency market. On Monday, Bitcoin fell below $23,000, and Ethereum traded below $1,200.