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Celsius Paydowns Take Crypto Lender Into ‘Uncharted Territory’

  • Repaid over $900 million in DeFi debt since withdrawal halt
  • Moves raise legal questions on who should be paid first
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As Celsius Network Ltd.’s customer withdrawal freeze enters a full month, the beleaguered crypto lender has paid back a string of debts totaling more than $900 million during the same period to decentralized-finance platforms. 

The paydowns have raised the specter of a legal debate on how and in what order should distressed crypto companies pay back creditors -- whether they are actual people or platforms governed by computer code referred to as smart contracts. Celsius has made the repayments in stablecoins to DeFi platforms Aave, Compound and Maker since it halted customer withdrawals on June 12, according to Bloomberg’s tally based on blockchain data.