Celsius Transfers $125 Million Worth of Ether to Exchanges Amid Bankruptcy
Celsius, the embattled crypto lending platform, has moved around $125 million worth of Ether to exchanges Coinbase and FalconX as part of its Chapter 11 bankruptcy restructuring process. The transfers are likely the initial steps taken by Celsius to liquidate assets and fund creditor repayments as outlined in its reorganization plan.
Key Points
- Celsius has transferred over $125 million worth of Ether to exchanges Coinbase and FalconX.
- The transfers are part of Celsius’ bankruptcy restructuring process and plans to repay creditors.
- Celsius still holds over 550,000 ETH worth $1.36 billion that could be used for future creditor repayments.
- FTX and Alameda have also moved $28 million in crypto to exchanges, potentially to raise funds for their own creditor repayments.
- Demand and prices for Celsius’ CEL token continue to decline during the bankruptcy proceedings.
Celsius Retains Control of Over 550,000 ETH
Celsius still maintains control of more than 550,000 ETH, valued at approximately $1.36 billion. These funds were previously locked up in staking protocols. In January, Celsius withdrew 206,300 ETH worth $407 million from staking to cover bankruptcy costs and prepare for creditor distributions. However, specific timelines for these distributions remain unclear, leaving creditors waiting for over 18 months since Celsius froze withdrawals in June 2022 due to a liquidity crunch.
FTX and Alameda Research Follow Suit
Following in Celsius’ footsteps, bankrupt firm FTX and its trading affiliate Alameda Research have also moved crypto assets to exchanges. FTX transferred $28 million worth of crypto, including $18.7 million in Wrapped Bitcoin token (WBTC) to Coinbase and Binance. This move is likely an effort by FTX to raise capital for creditor repayments after declaring bankruptcy in November 2022.
Declining Demand for Celsius’ CEL Token
The bankruptcy proceedings have led to fading trader demand for Celsius’ native CEL governance token. Over the past month, CEL prices have dropped 24%, currently trading at $0.20, marking a 70% decline in the last year. CEL futures open interest has also decreased by 36%, indicating traders are closing positions at higher rates. Technical indicators suggest bearish sentiment as Celsius’ restructuring continues to impact CEL markets.
Hot Take: Slow Progress and Market Risks
Celsius and FTX’s recent transfers of crypto assets to exchanges provide initial insights into their bankruptcy asset liquidation plans. However, progress remains slow for both companies, with creditors still awaiting repayments after a long wait of over 18 months. These moves also carry market risks, as the introduction of additional supplies may trigger further cryptocurrency sell-offs.
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