Celsius Changes Its Legal Team, Pays $20M In Aave Debts

Crypto lending platform Celsius has allegedly hired lawyers from Kirkland & Ellis LLP to offer ideas and advice on its restructuring options. That is the company that helped Voyager Digital with its bankruptcy filing in the past week.

The embattled platform continues striving to wind down its debts to decentralized finance (DeFi) lending protocols, having only paid off 20 million USDC to Aave.

Based on a July 10 report from the Wall Street Journal, the firm has hired lawyers to advise on options that include a bankruptcy filing in place of the previously hired law company Akin Gump Strauss Hauer & Feld LLP.

Notably, Kirkland & Ellis LLP describes itself as an international law firm serving clients in private equity, merger and acquisition, and many other corporate transactions, having been launched in 1909.

The law firm has also been tapped as general bankruptcy counsel for Voyager Digital in its bankruptcy filing that it filed in the Southern District Court of New York on July 5, a few days after it stopped withdrawals, trading, and deposits on liquidity issues.

Despite the current concerns that the crypto lender might follow a similar path, Celsius has continued to wind down its debts to DeFi lending protocols, having managed to pay off 20 million in USD Coin (USDC) to Aave.

The most recent loan repayment was picked up by blockchain analytics firm Peckshield on July 10, sharing a screenshot of the 20 million USDC transfer from a Celsius wallet to Aave Protocol V2.

#PeckShieldAlert Celsius (0x8ace…130ee8) has repaid 20m $USDC on Aave pic.twitter.com/U7h1Lvyy5x

— PeckShieldAlert (@PeckShieldAlert) July 11, 2022

DeFi tracking platform Zapper shows that Celsius owes nearly $130 million in USDC and $82,500 in Ren (REN) to Aave, together with $85.2 million in Dai (DAI) to the Compound Protocol, with a cumulative debt of $215 million.

Celsius Is Paying Off Debt

In the past week, the lending platform paid off its outstanding $41.2 million debt to Maker protocol on July 7, freeing up over $500 million in Wrapped Bitcoin (wBTC) collateral.

Paying down its debt has been perceived to be a positive for Celsius’ depositors, who have not managed to access their crypto funds since withdrawals stopped on June 13 and fear a loss of their funds in case the firm was to go bankrupt.

In the past week, crypto lawyer Joni Pirovich said that Celsius’ repayment of its loan position would eventually help its clients, as it would free up capital that could be used to meet client withdrawal requests.

Pirovich added that even if Celsius has filed for bankruptcy, repaying its loan positions and withdrawing collateral may help in improving the situation of its customers.