EquitiesFirst, a private lender, is reportedly guilty of Celsius network $439 million, Financial Times reported.
According to the report, the Indianapolis-based company’s debt will be part of Celsius’s assets on which customers would depend to withdraw their assets.
Celsius CEO Alex Mashinksy had previously revealed that the company was in debt from an undisclosed private lender.
According to the report, Celsius borrowed from EquitiesFirst for the first time in 2019, but when he tried to repay his loan in July 2021, the lender said he was unable to return his collateral in a timely manner.
EquitiesFirst will repay the loan monthly from September 2021. The company pays Celsius $5 million a month.
Meanwhile, the filings showed that the debt consists of $361 million in cash and 3,765 units of Bitcoin.
EquitiesFirst reportedly said it is “in talks with our client and both parties have agreed to extend our commitments.”
Celsius facing new lawsuit
The problems facing the controversial crypto lending company, Celsius Network LLC, have increased as it has become entangled in a new class action lawsuit filed by an investor who said the company was operating “like a literal Ponzi scheme” .
According to Law360, the lawsuit was filed in the US state of New Jersey by Taylor Goines.
A review of the lawsuit found that Celsius Network was accused of losing approximately $10 billion in assets by trading unregistered securities in a Ponzi scheme.
Similar to a literal Ponzi scheme, Celsius could only keep its promises about rates of return by continually attracting new investors whose new cash flow would be used to pay off returns for old investors.
Goines explained that his purchase of Celsius Financial Products only resulted in investment losses because of the company’s actions.
The plaintiffs also argued that the recent market collapse has shown that the cryptocurrency lender did not have the assets to meet its withdrawal obligations.
Earlier this month, Jason Stone, a former Celsius investment manager, said archived a lawsuit against the company.
In the lawsuit, Stone alleged that the lender engaged in market manipulation without taking basic accounting measures to protect customers’ deposits.