Bankrupt Celsius Network to Unstake Ethereum Holdings for Asset Distribution
Celsius Network, the bankrupt crypto lender, has announced that it will unstake its existing holdings of Ethereum in order to ensure ample liquidity when distributing assets to its creditors. The company has started the process of recalling and rebalancing assets as part of its preparation for asset distributions.
In addition, Celsius Network will unstake its existing ETH holdings to offset certain costs incurred throughout the restructuring process. The staked ETH has provided valuable staking rewards income to the estate. According to data from Nansen, Celsius accounts for 32% of ETH awaiting withdrawal, which amounts to approximately 206,300 ETH worth over $466 million at current prices.
Background: Celsius Network’s Bankruptcy and Repayment Plan
Celsius filed for Chapter 11 bankruptcy protection in July 2022 due to the crypto market downturn triggered by the collapse of Terra. In November 2023, a judge approved a customer repayment plan that would return between 67% and 85% of creditors’ investments. This plan involves distributing around $2 billion worth of Bitcoin and Ethereum among the firm’s creditors.
Former CEO Alex Mashinsky, who was arrested in July 2023, is facing seven charges including securities fraud, commodities fraud, and wire fraud. His trial is scheduled for September 17, 2024.
Hot Take: Celsius Network Takes Steps Towards Asset Distribution
Celsius Network is making progress towards distributing assets to its creditors by unstaking its Ethereum holdings and ensuring ample liquidity. This move aims to offset costs incurred during the restructuring process while leveraging the valuable staking rewards income from the staked ETH. With a significant amount of ETH awaiting withdrawal, Celsius plays a major role in the distribution of assets. The bankruptcy filing and subsequent repayment plan have been significant milestones in the company’s journey towards resolving its financial obligations. The upcoming trial of former CEO Alex Mashinsky adds another layer of complexity to the situation, highlighting the legal challenges faced by Celsius Network.
By
By
By
By
By