A new court filing suggests Celsius Network, the cryptocurrency lender that declared bankruptcy in July, only has enough money to sustain itself until October. At current crypto prices, Celsius holds $2.8B less in crypto than it owes clients.

Why should we care?
To meet depositors’ withdrawal demands before it carried out a freeze, Celsius sold crypto assets below market value, leading to a significant mismatch between its liabilities and liquidity. “The company likely had to sell assets at depressed prices to meet customer withdrawals before the 'pause,'” said Brandon M. Hammer, counsel at Cleary Gotleib Stein & Hamilton. “Such sales are common in bank run situations and may, depending on the particular facts, be subject to clawback risk.” What’s more, according to the Financial Times, Celsius CEO Alex Mashinsky ordered massive crypto trades using faulty information—bypassing and overruling Celsius’s trading desk—leading to more than $100M in losses. With a $1.2B hole in their balance sheet, it's likely that Celsius will soon fully collapse, creating another crypto winter-induced corporate casualty. Celsius, which has 1.7 million users, can cause serious damage by going defunct, and potentially induce further bankruptcies the way Terra Luna’s collapse had a domino effect. VC funding continues to flow into crypto ventures, but market demand may significantly cool, causing capital supply that exceeds actual market appetite for new blockchain-based products and services.