Celsius Reportedly Unlikely to Get Bailout Money from Investors
As the downturn triggered by Celsius Network (CEL) continues to impact crypto businesses worldwide, investors behind the business are unlikely to ensure more financing to bail out the troubled crypto lender, “people with knowledge of the situation” told Financial News.
Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ) and WestCap, a growth-equity firm set up by technology investor and former Airbnb CFO Laurence Tosi, are not expected to inject more funds to help Census, these persons told the news outlet. Last year, WestCap and CDPQ l led a Series B funding round under which some USD 750m was raised for Celsius, bringing the startup’s valuation to more than USD 3bn.
“Few are feeling OK about things,” one person aware of the talks between Celsius and its investors is quoted as saying. “There was more risk in this than fully appreciated”.
Crypto industry players continue to make effort to distance themselves from the damage caused by Celsius. Among others, MakerDAO recently voted to temporarily halt Aave (AAVE)’s capacity to generate DAI for the lending platform’s lending pool without collateral through the DAI Direct Deposit Module (D3M) amid fears that the Celsius fallout could blow up the staked ether (stETH) peg.
However, today, Stani Kulechov, founder of Aave and Lens Protocol, claimed that,
“Celsius has been taking measures to repay borrows on Aave Protocol and supplying more collateral to decrease their exposure.”
Meanwhile, the Florida, USA-based company could be facing further trouble as state securities regulators in Alabama, Kentucky, New Jersey, Texas, and Washington have launched probes into Celsius Network’s decision this week to suspend customer redemptions, Joseph Rotunda, the enforcement director at the Texas State Securities Board told Reuters.
Joseph Borg, Director of the Alabama Securities Commission, confirmed that Alabama, Texas, New Jersey, and Kentucky securities regulators were investigating the matter. Borg said that Celsius has been responsive to the regulators’ questions, but the investigation is still in its initial stages.