As reported by Reuters, a spokesman for Ripple revealed that the crypto solutions company will likely acquire assets belonging to the crypto lending platform, Celsius Network. It is not yet known whether Ripple intends to acquire Celsius company entirely.  

Read Here: Here’s How LUNA and UST Collapse Caused stETH  De-pegging; Celsius and 3AC Liquidation Problems: Nansen

However, the unidentified Ripple representative said, “We are interested in learning about Celsius and its assets, and whether any could be relevant to our business.” 

Ripple has continued to grow through the crypto market turmoil and is actively looking for merger and acquisition (M&A) opportunities to strategically scale the company,” the spokesperson added.

The interest-earning yield platform, Celsius, was hit hard with insolvency problems as the cryptocurrency market experienced great turbulence in the past few months. 

In accordance, the platform halted withdrawals, transfers, and other operations in June, which affected many users and linked companies badly. The platform also became a debtor to several crypto companies including Maker Protocol. 

Read More: Crypto lending Firm Celsius Suspends Withdrawals and Transfers, Citing Market Situations

The New Jersey-based blockchain company filed for Chapter 11 bankruptcy at the United States Bankruptcy Court for the Southern District of New York, in July. The bankruptcy filing revealed that Celsius Network has a $1.19 billion deficit on its balance sheet. 

It is worth noting that Voyager Digital, another United States cryptocurrency lending platform also filed for bankruptcy after halting withdrawals and other operations on its platform. 

Three Arrows Capital (3AC) faced a similar insolvency problem and filed for a Chapter 15 bankruptcy to secure its U.S. assets after being issued a liquidation order by a court in the British Virgin Islands (BVI). 

The post Ripple Is Considering Celsius Network Acquisition: Details appeared first on Times Tabloid.

Celsius, a centralized lending firm currently facing a severe liquidity crisis, had previously borrowed hundreds of millions on Maker using wrapped bitcoin (WBTC) as collateral.

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By paying down its Maker debt, Celsius has de-risked its loan position from potential liquidation. In decentralized finance, liquidations occur when traders cannot repay their loans on time, and the protocols automatically sell their collateralized assets.

As the price of bitcoin dropped recently, Celsius faced a heightened risk of liquidation. The repayment has helped reduce the liquidation price on its WBTC collateral to less than $5,000, according to data from DeFiExplore.

Read Also: Crypto lending Firm Celsius Suspends Withdrawals and Transfers, Citing Market Situations

On-chain data suggests that Celsius’ obligations are complex and it maintains collateralized loans on multiple lending protocols. The firm still owes $82 million to Maker, $100 million to Compound, and $175 million to Aave.

Celsius’ recent developments are notable given questions about the platform’s solvency and broader fears about solvency across the crypto industry — particularly centralized lenders _ amid a decline in major digital asset prices. Those concerns were kicked into overdrive when Celsius announced that it would halt withdrawals from its platform.

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The post Celsius Network Repays $120 Million Stablecoin Debt to Maker Protocol appeared first on Times Tabloid.

In the blockchain newsletter for the month of June 2022, Pantera Capital explained what triggered the fiascos mentioned above.

For Terra ecosystem, the firm said the crypto industry’s detractors will certainly term the incident as a big deal of failure, but it cannot overshadow blockchain’s utility and promises.

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Explaining further, the firm stated that the Terra ecosystem’s collapse is similar to the dot.com era when some experiments worked, while others failed. This led to the failure of Pets.com but didn’t mean the internet has no viable utility. It only means that one business model wasn’t right for the time.

So, the newsletter says LUNA’s failure only means that one type of algorithmic stablecoin failed to work as planned, which does not imply that blockchain technology has failed.

Read Also: Three Arrows Capital (3AC) Files Chapter 15 Bankruptcy, Seeking to Defend its US Assets

Pantera Capital noted:

“There’s a ton of stress about whether Tether is fully backed by collateral.  In 2019 they admitted it wasn’t.  It serves its purpose – shadow banking system.  However, most stablecoins, like Coinbase and Circle’s USDC are fully backed with treasury bills, very transparent, and audited. 

“You have to work through some of these experiments. Ultimately, that vast majority of the stablecoin market will look just like USDC and FedCoin.”

For Celsius, the company wrote:

“Celsius is a centralized crypto lending business.  Their business model is:  you deposit USDC, ETH, some sort of cryptocurrency, and they promise a yield on it.“

“What ended up happening is they put a bunch of those assets into either very risky projects or into things that have a long liquidity horizon.  Classic leveraged lending model – borrow short-term, lend long and risky. 

“The liquidity mismatch where you have customers who expect to be able to withdraw their funds within 24 hours, but you have assets that may be locked up for months.  Celsius ended up freezing withdrawals and were forced to sell a huge amount of crypto over the last week, which is part of what caused a cascade in prices.”

Read Also: $559.6 Million Used By Three Arrows Capital (3AC) to Acquire Locked LUNA Now Worth $670

Regarding the current issue faced by Three Arrows Capital (3AC), Pantera Capital said:

“Similar situation with Three Arrows Capital, known as 3AC.  Very leveraged with liquidity mismatches. They weren’t able to meet their margin calls.  They ended up being a forced seller in a time where there wasn’t that much liquidity in the markets.

“The markets are very efficient.  With a 70-90% downdraft we probably have worked through most of the problems.  We think these events have mostly washed through the crypto space.”

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The post Pantera Capital Highlights Terra (LUNA), Celsius, and Three Arrows Capital’s Fiasco appeared first on Times Tabloid.

Celsius Network, an interest-earning yield platform, and crypto hedge fund, Three Arrows Capital (3AC), have been hit hard with liquidity and insolvency problems as bears take their turn in the crypto market.

The Terra Collapse Factor

From the evidence and result derived via Nansen’s recent on-chain data forensics, the withdrawal of almost $800 million altogether by Three Arrows Capital (3AC) and Celsius from Curve’s main liquidity pool was triggered by the Terra ecosystem’s collapse. 

Nansen reports that this huge withdrawal was done between May 7 and May 16 which happens to be the days when UST de-pegged, followed by the free fall of LUNC.

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Precisely, on May 12, Three Arrows Capital removed $400m of liquidity (128k stETH + 73k ETH) from the stETH/ETH Curve pool in a single transaction. Meanwhile, Celsius took out $380m of liquidity on the same day in three separate transactions, the Nansen report shows.

To note, the main liquidity pool on Curve saw a decline in more than half of its total value locked as a result of the large withdrawals (almost $800 combined) executed by Celsius and 3AC.

Per the report, an accompanying liquidity crisis was seen on Curve as reflected in the pool’s imbalance which left the stETH price negatively exposed.

In addition, the report stated, “as stETH cannot be redeemed for ETH until after the Merge, the primary way to obtain liquidity on large stETH positions is through Curve.”

Meanwhile, Curve’s liquidity pool imbalance that left stETH vulnerable could not recover after Terra’s collapse, due to the resulting poor market conditions.

This means that liquidity was dried out for stETH on the Curve defi platform. Thus, there was no other avenue for large stETH holders such as Celsius Network to cover their positions.

This was what led to the interest-earning yield platform halting users from making withdrawals, swaps, and transfers since June 13 in a bid to stabilize liquidity and operations.

.@CelsiusNetwork is pausing all withdrawals, Swap, and transfers between accounts. Acting in the interest of our community is our top priority. Our operations continue and we will continue to share information with the community. More here: https://t.co/CvjORUICs2

— Celsius (@CelsiusNetwork) June 13, 2022

Related: $559.6 Million Used By Three Arrows Capital (3AC) to Acquire Locked LUNA Now Worth $670

Nansen Explains Staked ETH (stETH) De-pegging

Staked Ethereum (stETH) which is still subject to price discovery is a derivative of ETH. stETH tokens are designed to closely track the value of ETH. Notably, stETH has traded on par with ETH (1:1) until the UST and LUNC descent. 

Therefore, the deviation of stETH:ETH from the 1:1 ratio can be dated back to the UST and LUNC crash incident in May.

According to the blockchain analytic firm, many depositors of bETH hurriedly bridged back their assets to the Ethereum mainnet as UST de-pegged. The aim here was to secure their funds in fear of Terra being compromised, which later happened.

In other words, users bridged back and unwrapped their bETH for stETH via the Lido Finance platform. Meanwhile, bETH flows to and from the Terra chain through the Wormhole bridge.

“Bonded ETH (bETH) are wrapped tokens of Lido Finance’s staked ETH (stETH), refitted to interact with Anchor smart contracts. More so, Bonded ETH tokens are used as collateral to borrow Terra stablecoins from Anchor.”

Nansen on-chain forensic reveals that 615,980 bETH was bridged back to Ethereum during that Terra collapse period. It also shows Celsius Network and Hodlnaut were some of the top recipients of the bETH.

Part of the Nansen report said;

“From May 7, Wormhole’s bETH holdings fell from a peak of 667k to 32k within four days – a 95% drawdown. Similarly, Anchor’s vault also experienced an abrupt fall of over 96% from its high of 665k stETH to 26k stETH. This reduction is analogous to flows from Terra to Ethereum, as investors were immediately unwrapping their bETH for stETH after bridging back.”

“Of the 615,980 bETH bridged back to Ethereum from Terra, 604,716 were converted back to stETH within the first week between May 7 and May 16 since Anchor’s vault is essentially a proxy to mint bETH and, after the implosion, there was no reason to hold bETH. Similar to bETH flows, May 12 had the most significant volume for stETH DEX trades. The dashboard below shows that many of the largest holders unwrapped their bETH back to stETH.”

Additionally, Nansen forensic shows that there was a corresponding high sell pressure from stETH into ETH in the stETH/ETH Curve pool. It is said these sellers were either deleveraging their positions and/or getting bETH from Terra and selling it on Mainnet as stETH.

This then led to the huge balance reduction in Curve’s main liquidity pool. Thus, resulting in the de-pegging of stETH.  Meanwhile, Three Arrows Capital (3AC) was the largest recipient of stETH withdrawn from the main stETH/ETH Curve pool.

Read Also: Chainalysis Pinpoints Large Trades That Triggered TerraUSD (UST) and Terra (LUNA) Collapse: Details

Big Players Take the Blow

On the whole, Nansen finalizes that the plummeting of UST and old LUNA tokens played a key role in the de-pegging of stETH/ETH. Accordingly, the incident is said to be the major contributor to the insolvency problem faced by market participants such as Three Arrows Capital (3AC) and Celsius. 

The Singapore-based crypto hedge fund, Three Arrows Capital (3AC), which appears to be the most impacted, has been issued a liquidation order by a British Virgin Islands (BVI) court. On the other hand, Celsius halted its operations on June 13.

On the other hand, Nansen submits that Terra’s collapse was the consequence of investment decisions made by several well-funded entities. In another news, Uppsala Security reveals slush funds amounting to $3.6 billion in UST and USDT, used by Do Kwon’s TFL to manipulate the price of UST.

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The post Here’s How LUNA and UST Collapse Caused stETH  De-pegging; Celsius and 3AC Liquidation Problems: Nansen appeared first on Times Tabloid.

The firm, which sources claimed only has a few more weeks-worth of financial resources to support customer withdrawals just about a week ago, noted in a tweet today:

“@CelsiusNetwork is pausing all withdrawals, Swap, and transfers between accounts. Acting in the interest of our community is our top priority. Our operations continue and we will continue to share information with the community.”

.@CelsiusNetwork is pausing all withdrawals, Swap, and transfers between accounts. Acting in the interest of our community is our top priority. Our operations continue and we will continue to share information with the community. More here: https://t.co/CvjORUICs2

— Celsius (@CelsiusNetwork) June 13, 2022

Read Also: Mike Novogratz of Galaxy Digital Expects Next Crypto Bull Cycle to Start in Q4 of 2022

As once reported by Financial Times, the firm led by Alex Mashinsky had about $12 billion in customer assets as of May. And the number of its customers stands around 1.7 million.

In a note to clients captioned in the announcement, Celsius stated:

“Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts. We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.

“Acting in the interest of our community is our top priority. In service of that commitment and to adhere to our risk management framework, we have activated a clause in our Terms of Use that will allow for this process to take place. Celsius has valuable assets and we are working diligently to meet our obligations.

“We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets. Furthermore, customers will continue to accrue rewards during the pause in line with our commitment to our customers.”

Read Also: CryptoQuant CEO Says One Metric Is Flashing Over 50% Crash for Bitcoin (BTC) Bulls

This announcement greatly affected the price of the Celsius token moments later. The price of the token subsequently fell by 45% to $0.21.

The new development is the representation of the current market distress, which has dipped the prices of most coins in the market, especially the two largest cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH).

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The post Crypto lending Firm Celsius Suspends Withdrawals and Transfers, Citing Market Situations appeared first on Times Tabloid.