FTX Steps Away From Celsius Acquisition, Citing a “$2 Billion Hole” in Its Balance Sheet

Vignesh Karunanidhi
FTX Steps Away From Celsius Acquisition, Citing a “$2 Billion Hole” in Its Balance Sheet
Source: Bitcoin News

Cryptocurrency exchange FTX is stepping away from the Celsius Network acquisition deal, citing a $2 billion hole in its balance sheet. Sam Bankman-Fried’s exchange had initial plans to take over Celsius Network.

The information comes from two sources who told The Block that FTX was walking away from the deal. According to a Thursday report by the Block, FTX was in communication with the troubled Celsius Network regarding financial support or a takeover. But after a careful analysis of Celsius’s financial conditions, FTX decided not to move ahead with the decision.

Sources cited a $2 billion hole in Celsius’s balance sheet

FTX found it tough to deal with Celsius Network and also found a $2 billion hole in its balance sheet, according to one of the sources. The announcement from Celsius on June 13 comes after people were slowly recovering from the fall of Terra. The crypto lending platform halted withdrawals, transfers, and trading, citing harsh market conditions.

It’s been over 17 days and the user funds are still frozen, with thousands of customers unable to access their funds. The platform has been quite slow with any kind of updates, as it was announced on June 19 that the process would be slow as they are continuing to stabilize their operations and liquidity.

Despite the fact that withdrawals have been banned, crypto lending service Celsius continues to pay weekly incentives to investors. Many people have called it “insulting.”

Investors are perplexed as to what this means. Their incentives are piling up, but there is no way for them to cash out. Several users turned to Twitter to voice their displeasure with the company. Meanwhile, Celsius Network CEO Alex Mashinsky said that the assets were safe.

He further stated that the platform is working around the clock to resolve the issue. Celsius token (CEL) tumbled greatly as it fell 20% in the last 24 hours and is currently trading at $0.6043.