Defunct crypto platform Celsius generated a lot of controversy in June, when the company announced the cesation of all withdrawals, swaps, and trades. Ever since June 13th, when the company’s native token, CEL, reached its all time low of $0.19, the bankrupt network’s coin has, ironically, been on the rise, reaching as high as $2.07 at one point.
A Twitter Community Planned Short Squeeze
One month after halting all transactions, the struggling crypto platform filed for Chapter 11 bankruptcy, on July 13th. At that time, the Celsius Network (CEL) coin had already started showing signs of life once more, trading at $0.55. However, the coin has since miraculously tripled in price, and now trades at $1.85 at the time of writing, according to CoinGecko.
Posting a public campaign on Twitter, a group of traders decided to take advantage of the fortified company’s coin. As #CELShortSqueeze trended among crypto enthusiasts on Twitter, the short squeezers promoted a sky-high selling price of $100 per Celsius Network (CEL) token. The FTX crypto exchange had held the largest supply of 4.4M CEL tokens, and the squeezers targeted the three million of those CEL tokens on FTX that were open for short positions.
A Dedicated Committee of Unsecured Creditors
The Celsius creditor committee was formed after the company filed for bankruptcy. Today, the committee published its first report, taking shots at the company’s CEO, as well as other key workers. An excerpt from the report read: “We are looking into conduct of Mashinsky and other Celsius insiders, including the problematic asset deployment decisions, prepetition transfers and other issues”. Furthermore, the committee’s representatives expressed their dedication to the cause, assuring investors that they would be “working day and night to protect the rights of its constituents”.
According to the bankruptcy case documents, the company owns an enormous $4.7 billion to customers alone. There is also the matter of a $1.2 billion shortage on the balance sheet. Celsius is now looking into restructuring, and the funds for the process are to be gathered from Bitcoin (BTC) mining and cash reserves.
Crypto Analyst and Asset Manager Samir Kerbage explained: “Since the circulating supply is very small, it is technically possible to create a short squeeze, although the impact in the overall market could be very limited and hard to sustain over a longer period of time”.
Despite the unexpected spike in the Celsius Network’s (CEL) market price, the delapidated company’s native token is still 70% down from its all time high.
Aite. Maybe you fumbled a bag or two of investments this cycle— pauls.eth 🌐3⃣🆔 (@PointPaul) August 9, 2022
But no one fumbles bags (including millions of other people's bags) as well as @Mashinsky of $CEL
WSJ = Celsius owes bank customers $4.7 Bn USD, whilst wearing shirt: *INSERT*#CelShortSqueeze pic.twitter.com/NfSLdeou5P
On the Flipside
Find out what can be taken from the cases of Celsius, BlockFi, Voyager & others