Celsius has filed a proposal to liquidate Bitmain coupons and credits for $14.4 million as it risks hitting a liquidity wall.
The liquidity trouble deepened for the crypto lender after the court ordered it to allow some customers to withdraw 94% of their funds. The now-bankrupt company might even run out of cash by June, according to a Bloomberg article.
Hence, the company is asking for more time from the court to fulfill its Chapter 11 bankruptcy plans. Along with additional time, Celsius is looking to gather another $14.4 million in liquidity from the Bitmain coupons and credits.
What are Bitmain Coupons?
Christopher Ferraro, Celsius’s Interim Chief Executive Officer (CEO), filed a proposal to the court seeking to liquidate Bitmain coupons.
Bitmain is a China-based blockchain hardware provider. According to the filing, the company provided Celsius with free coupons for purchasing mining rigs in the future.
The coupons can only be used to avail of some discounts while purchasing the mining rigs. It expires six months from the date of acquisition. Hence, Ferraro writes that the coupons will be worthless to Celsius as they don’t have plans to purchase mining rigs.
Source: Court filings
Celsius Plans to Liquidate Bitmain Coupons at a Discount
The total face value of coupons is over $40 million, but Celsius expects to raise $7.4 million by selling these coupons. Ferraro further mentions that Celsius is in talks with six potential buyers. They are willing to sell coupons at a discount due to the urgent need for liquidity.
Additionally, Celsius holds approximately $8.1 million worth of Bitmain credits. They are completely redeemable to purchase mining rigs for free but cannot be transferred to other parties. Celsius wants to purchase mining rigs with Bitmain credits and later sell those rigs for $7 million.
This is the latest attempt by Celsius to raise funds. Last month, it dragged one of its investors to court for a breach of contract. The bankrupt lending protocol seeks damages worth over $6 million from its Series B investor – Fabric Ventures.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.