Embattled crypto lending platform Celsius is moving significant holdings to exchanges as part of its Chapter 11 bankruptcy restructuring process first filed in July 2022.
Over the past week, Celsius has transferred around $125 million worth of Ether to Coinbase and FalconX according to on-chain analytics firm Arkham Intelligence. The transfers could signify initial steps by Celsius to liquidate assets to fund creditor repayments as laid out in its reorganization plan.
Keypoints
- Celsius has transferred over $125 million worth of Ether to exchanges Coinbase and FalconX over the past week
- The transfers are likely part of Celsius’ bankruptcy restructuring process and plans to begin repaying creditors
- Celsius still holds over 550,000 ETH worth $1.36 billion that could be used for future creditor repayments
- FTX and Alameda also moved $28 million in crypto to exchanges, likely to raise funds for their own creditor repayments
- Demand and prices for Celsius’ CEL token continue to decline amid their ongoing bankruptcy proceedings
Celsius still retains control of over 550,000 ETH – worth approximately $1.36 billion at current prices – that was previously locked up in staking protocols. Earlier in January, Celsius withdrew 206,300 ETH with an estimated value of $407 million from staking, stating the funds would help pay bankruptcy costs and prepare for creditor distributions.
While bankrupt, Celsius has emphasized its intentions to eventually make customers whole by distributing both Bitcoin and Ethereum holdings. However, specified timelines remain unclear, leaving creditors waiting over 18 months since Celsius originally froze withdrawals in June 2022 amid a liquidity crunch.
Meanwhile, fellow bankrupt firm FTX and its trading affiliate Alameda Research have mimicked Celsius by shifting crypto assets to exchanges. According to blockchain analytics provider Spot On Chain, FTX moved $28 million worth of crypto last week, including $18.7 million in Wrapped Bitcoin token (WBTC) to Coinbase and Binance.
???? Institutions #FTX and #Celsius moved $35.1M worth of $WBTC and $ETH to CEX as the $BTC and $ETH prices surged sharply in 24H.
1. #FTX and #Alameda Research moved $11.72M, including:
– 200 $WBTC ($9.39M) to #Binance at $46,952
– 1,000 $ETH ($2.33M) to #Coinbase at $2,3302.… https://t.co/oggGMhcUC8 pic.twitter.com/o79tjOQWLk
— Spot On Chain (@spotonchain) January 9, 2024
The transfers align with FTX’s recent efforts to raise capital for creditor repayments after declaring bankruptcy in November 2022. FTX administrators have recovered approximately $7 billion in assets so far, including $3.4 billion in cryptocurrencies. Early recovery valuations in October 2023 pegged potential creditor returns between $0.80 and $1.00 per dollar claimed.
Alongside shifting assets to exchanges, on-chain activity highlights fading trader demand for Celsius’ native CEL governance token amid its drawn-out bankruptcy process. Over the past month, CEL prices have dropped 24% to currently trade hands at $0.20 – down 70% in the last year.
According to derivatives data provider Coinglass, CEL futures open interest has also plunged 36% since late December, signalling traders are closing positions at higher rates. Technical indicators underline bearish sentiment as Celsius’ restructuring continues weighing on CEL markets.
With creditors still awaiting repayments over 18 months later, Celsius and FTX’s recent crypto transfers to exchanges could offer initial glimpses into their respective bankruptcy asset liquidation plans. But progress remains slow for both firms. The moves also carry broader market risks if introduced supplies spark further cryptocurrency sell-offs.
