EquitiesFirst Owes $439 Million In Debt to Celsius Network

EquitiesFirst, an Indianapolis-based specialist finance company best known for lending cash to institutions secured against their stock holdings, is identified as a debtor to the prominent crypto lender Celsius Network. That is according to Celsius’ bankruptcy filings, as reported by Financial Times media outlets.

On Thursday, Celsius CEO Alex Mashinsky stated in a court filing that his firm was owed $439 million by a “private lending platform,” which he did not mention. However, two individuals familiar with the knowledge disclosed that the platform is EquitiesFirst.

The court filing said the relationship between the two companies initially came from deals in which Celsius started borrowing from EquitiesFirst in 2019 on a secured basis to support its business operations.

The relationship expanded and later it turned out that EquitiesFirst owed Celsius amounts worth $509 million on an unsecured basis.

EquitiesFirst had slowly paid down the debt since September last year. Although the firm is steadily paying off the debt, there is still an outstanding loan worth $439 million — made up of 3,765 Bitcoins and $361 million in cash — which are yet to be paid.

“EquitiesFirst is in ongoing conversation with our client and both parties have agreed to extend our obligations,” EquitiesFirst told Financial Times media.

EquitiesFirst, which was founded in 2002, specializes in loans secured against company stock. The firm began lending against cryptocurrencies around 2016.

According to the report, EquitiesFirst’s lending in the crypto landscape was typically at a 60% loan-to-value, secured against cryptocurrencies like Bitcoin and Ether.

Efforts to Rescue Business

The funds owed by EquitiesFirst is a huge amount of Celsius’s assets, which hundreds of thousands of its clients will be relying on to recover some of their deposits.

The EquitiesFirst debt, which Celsius had not disclosed before, now provides context to the difficulties the crypto lender encounters as crypto markets plunged hard this year.

On 12th June, Celsius suspended all customer transactions and withdrawals across its networks, citing extreme market conditions.

On Wednesday this week, Celsius filed for bankruptcy protection as it seeks to stabilize its business by restructuring in a manner that maximizes value for all of its stakeholders. In the meantime, Celsius stated that it has $167 million in cash on hand to support operations.

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