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The hidden link between FTX and Celsius

The Dirty Bubble Media investigation, behind the management of mike burgersburgunveiled links between FTX and Celsius which now see the first creditor of the second on the verge of bankruptcy.

The curious financial links between FTX and Celsius

What might have seemed like a cursory investigation led Dirty Bubble Media to dig into what appears to be genuine financial ties between the Fried Sam Bankman (SBF) and Celsius.

Thoroughly inspecting the near-bankrupt company’s public records, Mike Burgersburg noticed something few people would have noticed.

The Celsius company, according to public records investigations, used the FTX trading platform to buy its token (CEL) in 2021. The purchases were around 40 million CEL. They also coincided with a $750 million fundraiser. After the withdrawal freeze, the Celsius company through the FTX Exchange was able to liquidate millions of dollars of client assets. These funds were then used to reimburse Challenge loans.

In addition, Sam Bankman Fried’s company FTX is a creditor to Celsius through a $104 million loan.

Were SBF and FTX aware of Celsius’ financial moves?

“To be clear – in Voyager, our offers are generally determined by the fair market price, without discounts; the goal isn’t to make money by buying assets at pennies on the dollar, it’s to pay $1 on the $1 and return the $1 to customers.

If we were to get involved in Celsius, it would be the same.

Sam Bankman Fried’s words on Twitter suggest he seems determined to acquire what’s left of Celsius. Make a comparison with the Traveler platform recently acquired by SBF, a company close to bankruptcy at the same time as Celsius.

Therefore, we deduce that the company at the head of FTX was barely unaware of what was happening on its platform. Mainly because we are talking about a cash flow of $42 millionin the months of May to December 2021.

But Celsius’ moves on FTX don’t end there: Between June and October, Celsius sent 750 million USDC through FTX, trying to use the money to initiate its own loans. Therefore, it really seems impossible that SBF does not monitor the movements of one of the company’s biggest debtors.

Why does Celsius have serious problems?

Celsius’ bankruptcy filing revealed the platform’s serious difficulties. The argument made by its equity investors that they should have priority over creditors when allocating the platform’s remaining assets further complicates Celsius’s disentanglement process.

Celsius has a Deficit of $1.2 billion made up largely of user deposits, which will likely never be repaid for their investment.

The real oddity is that the crypto asset value appears to be $1.75 billion, but the total market cap of the CEL token is only around $300 million.

Celsius CEO, Alex Mashinsky, said the company may also sell mined Bitcoin (BTC) so that it can repay at least one of its loans and generate income for the company in the future. Celsius expects to be able to generate around 15,000 BTC through 2023.

According to many figures in the crypto world, the business in Mashinsky’s hands is hopeless and investors are unlikely to get their money back.

In a truly scathing tweet, the economist blogger Frances Coppola describes his view of Celsius’s moves and describes his view of the company as a shadow bank:

“Bank deposits are not even ‘customer assets’, much less ‘assets under management’. These are unsecured loans to the bank. They are therefore liabilities of the bank and are totally at risk in the event of bankruptcy.

Bank account holders have no legal right to the return of their funds. Although the terms of the account state that they can be withdrawn whenever the customer wishes, the bank may refuse to allow them to withdraw the funds if they do not have the cash to pay them.

Although the terms of service state that it is not a bank, Celsius’ business model is that of an unlicensed, unregulated bank without deposit insurance – a “ghost bank”.

Withdrawal of $10 million before filing for bankruptcy

The $10 million withdrawal raised even more suspicion about the shady activities of Alex Mashinsky and his company Celsius. made a few days before the bankruptcy filing.

The withdrawal was made by the CEO of Celsius himself, as if he was already aware of the freezing of customer funds and the bankruptcy filing that would take place shortly thereafter.

The Celsius CEO’s attorney said:

“In the nine months leading up to this withdrawal, he consistently deposited cryptocurrencies totaling as much as he withdrew in May.”

He added that Mashinsky and his family still had $44 million of cryptocurrencies frozen on the platform.

For a month, Mashinsky is no longer the CEO of Celsius. Despite this, he said he plans to come up with a plan to compensate investors.