As stated by the unnamed spokesperson of Ripple Labs, the company is “interested in learning about Celsius and its assets” and is exploring whether they could be relevant to Ripple Labs’ business.
The spokesperson though has declined to confirm if Ripple Labs is interested in acquiring Celsius Network. Both companies have not issued any official reports or comments yet.
Ripple Submitted Court Fillings For Celsius Bankruptcy Case
Earlier this week the bankruptcy court approved the fillings from Ripple Labs’ legal team asking for the representation in Celsius Network bankruptcy case. The blockchain payment company has never been officially mentioned among the major creditors of the Celsius lending company.
A former crypto lending giant Celsius Network collapsed in the first days of June after becoming officially insolvent and incapable to repay its creditors around $4.7 billion, according to the bankruptcy fillings.
Celsius is accused of being a Ponzi scheme, which used customers’ funds to manipulate the price of its CEL token but failed to hedge risks, which consequently led to hundreds of millions of dollars lost. According to the court filing, around $1.9 billion is currently missing on the Celsius Network’s balance sheet.
Reportedly, the former crypto lending giant has more than 100,000 creditors on the list, including Canada’s second-biggest pension and insurance fund The Caisse de Dépôt, and the trading company Alameda Research, which is closely related to the FTX co-founder Sam Bankman-Fried.
Since the middle of June the users of Celsius’ are unable to access their funds. The company has later said to be considering the potential restructuring of its debts.
Ripple’s CEO Open to Company’s Growth Plans
Ripple Labs team does not comment on the company’s plans to potentially acquire the bankrupt crypto lending giant. However, its CEO Brad Garlinghouse noted earlier in June, that the blockchain payment firm is working through its growth stage and will continue looking at various segments of the crypto industry for potential mergers and acquisitions.
If Ripple succeeds to acquire Celsius Network, the move could mark the company’s first major deal since it was founded in 2012. The publicly not traded Ripple secured a partnership with one of the biggest names in the remittance sector, MoneyGram, in 2019. It also has partnerships with numerous financial entities, including Bank of Amerika, Standard Chartered (OTC:SCBFF) Bank (SCB) and SBI Holdings.
Since early 2021 Ripple Labs in a notorious legal battle with the United States Securities and Exchnge Commission (SEC), which has accused the company of selling its XRP tokens as unregistered securities and thus violating the federal Securities Act.
On the Flipside
Why You Should Care
Despite the lawsuit with SEC, Ripple Labs remains one of the key players in the blockchain-based cross-border payments sector. If the company wins the legal battle with SEC, it should set a precedent on how other digital currencies should be treated. Legal clarity might also act as catalyzing factor for the price jump of the company’s native coin XRP.
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Source: Cryptocurrency - investing.com
