XRP On Growth Path As Ripple Considers Purchasing Assets Of Cash-Strapped Firm Celsius
Ripple, the blockchain payments company behind the XRP cryptocurrency, is reportedly considering acquiring assets belonging to beleaguered crypto lending firm Celsius.
According to a Reuters report, a spokesperson from Ripple disclosed that the firm was “interested in learning about Celsius and its assets,” in addition to assessing whether any of them could be relevant to their business. The move was informed by Ripple’s continued growth and desire to expand its business despite the hurdles facing the crypto market at large. Ripple “is actively looking for M&A opportunities to strategically scale the company,” said the spokesperson.
The move comes after Celsius filed for bankruptcy in June, citing “extreme market conditions” and acknowledging a $1.2 billion hole in its balance sheet. Celsius has however been open to buy-up offers even as it explores bailout paths for creditors who have been piling up pressure against it.
The June chapter 11 bankruptcy filings disclosed that Celcius holds a variety of possessions including digital assets held in custody accounts, loans, the company’s own CEL token, Bank cash and a bitcoin mining business. Last week, Ripple lawyers made an application seeking to be enjoined in the bankruptcy proceedings despite not being a major creditor for Celcius.
Although Ripple has not done any major acquisition deals previously, some pundits believe Celsius’s attractive legal background could be the key reason for Ripple’s increased interest in the firm, especially given its scuffle with the Securities Exchange Commission.
“We know Ripple is trying to buy Celsius. Why? Celsius marketed itself as a type of crypto bank,” Said Lisa Daly Digital Product Manager at BlackRock, “Celsius network is a regulated, “SEC-compliant” lending platform that enables users to receive interest on deposited crypto or take out crypto collateralized loans.”
Founded in 2017 by CEO Alex Mashinsky, Celsius had grown quickly due to its attractive interest rates to users tapping a $3.5 billion valuation last year. The company, however found itself trapped in a liquidity crisis with most of its crypto assets depreciating alongside the broad crypto market, despite its debt interest rates remaining elevated. Financial mismanagement and The Terra-induced stablecoin implosion storm, which caused widespread losses for several prominent industry players, would later bring Celsius to its knees.
That said, while a favourable outcome could come out of Ripple’s quest, it is unclear if the firm seeks to acquire Celsius altogether. In June, a source revealed that FTX “was interested in making a deal with Celsius but walked away” because of the irredeemable state of its finances, instead settling on BlockFi.
Source: Read Full Article
