Celsius Network, the beleaguered crypto lending platform that declared bankruptcy in July 2022, has recently been observed transferring substantial amounts of Ethereum (ETH) to centralized exchanges.
These moves come amidst increasing anticipation among creditors that Celsius Network, may begin repaying them in liquid cryptocurrencies starting in mid-February.
Celsius network’s strategic ETH transfers
Celsius executed a series of transactions transferring a staggering 443,961 ETH, valued at approximately $984 million at the time of the transfer, to Coinbase Prime, Paxos, and FalconX wallets. This substantial transfer was accomplished through 13 transactions, as reported by blockchain intelligence firm Arkham.
Spotonchain further noted that a significant portion of the 297,454 ETH sent to Coinbase was subsequently distributed across 12 fresh wallets, possibly as part of an over-the-counter (OTC) deal.
This large-scale movement of Ethereum followed another sizeable transfer conducted just two days prior on January 24, where Celsius moved 575,081 ETH using internal addresses labeled “Celsius Network: Staked ETH” and “Celsius Network: Eth2 Depositor.”
In total, since November 13, 2023, Celsius Network has moved a considerable 757,626 ETH to exchanges including FalconX, Coinbase, OKX, and Paxos. As of the latest update, Celsius still retains 62,469 ETH, which is valued at approximately $138.8 million based on current market prices.
The purpose behind the Ethereum transfers
The precise motivation behind these substantial Ethereum transfers remains unclear. However, a recent update to Celsius’ asset distribution FAQ, indicated that a limited number of corporate accounts would receive cryptocurrency through Coinbase.
Non-corporate account holders residing in the United States are expected to receive distributions via PayPal, while creditors outside of the United States will receive their payments through Coinbase.
The “Celsius NewCo Community,” a group of Celsius creditors on an unnamed platform referred to as ‘X,’ has expressed their anticipation that the distribution of liquid cryptocurrencies to Earn Creditors will commence in mid-February. They also noted that this distribution window will remain open for a year.
Meanwhile, a Celsius user known as “TheHawk” reported successfully removing all of their ETH from the platform, with the funds now held in a custody account rather than an Earn account.
Strategic asset movement for liquidity
Celsius has previously stated that it began transferring assets to ensure sufficient liquidity to facilitate potential asset distributions. In this vein, the company revealed plans to unstake its existing Ether holdings to cover certain costs incurred during the restructuring process and unlock ETH for timely creditor distributions.
According to data from Nansen, there are no pending ETH staking withdrawals as of now.
The bankruptcy administrators of Celsius took a noteworthy step by filing an intent to notify creditors that account holders who had withdrawn more than $100,000 in the 90 days preceding the company’s bankruptcy declaration on July 13, 2022, might be obligated to return these withdrawals by January 31, 2024.
Despite these substantial developments, the cryptocurrency markets have exhibited minimal reactions. At the time of writing, ETH prices remain relatively flat, trading at $2,225.
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