Written by Hazel J. Greene, Senior Analyst

Celsius Network, the troubled crypto lender, has once again made headlines with its latest move. The bankrupt company has agreed to sell its self-custody platform, GK8, at a substantial loss. Despite the sale proceeds, creditors will not be receiving any relief, as the majority will be allocated to legal expenses. This development further highlights the severe financial challenges faced by Celsius Network.

Back in 2021, Celsius Network made headlines by acquiring the GK8 platform, a self-custody solution, for a staggering $115 million. At the time, the platform showcased no red flags, and the business was flourishing. However, less than a year after the purchase, the crypto lender filed for bankruptcy, revealing a hole in its balance sheet running into billions of dollars. Now, Celsius Network has reached a settlement to sell the GK8 platform.

In a court filing submitted on July 17, it was disclosed that the GK8 platform is being sold for just $25 million, resulting in a massive 78% loss compared to its original purchase price. Unfortunately, the sale’s proceeds will not benefit the waiting creditors. The majority of the funds, amounting to $24 million, will be utilized to cover the legal expenses incurred during the bankruptcy proceedings. The remaining $1 million will be allocated towards the Series B holders.

Celsius Network justifies the allocation of proceeds by emphasizing its primary goal of reducing administrative costs. The company remains supportive of the proposed allocation, wherein the initial consenting Series B holders will receive reciprocal benefits. However, this arrangement offers no relief to the long-awaiting creditors.

Apart from the GK8 platform, Celsius Network is also selling other assets to address its financial struggles. Recent reports indicate that the crypto lender is liquidating approximately $63 million worth of crypto-assets. These assets will be sent to exchanges for sale, aiming to facilitate repayment obligations.

The native token of Celsius Network, CEL, has experienced a staggering decline. With its value down over 97% from its all-time high of $7.99, CEL currently trades at $0.16. A small increase of 2.35% in the last day offers a glimmer of hope amidst continued market volatility.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.