Celsius Recalls Crypto Assets amid Bankruptcy: Prepares for Payouts to Creditors
Summary:
Celsius, a crypto lending firm filing for bankruptcy, is recalling and rebalancing its crypto assets, like Ethereum, in preparation for payouts to creditors. The company plans to unstake its Ethereum holdings to cover restructuring costs and facilitate timely creditor distributions. The move comes as a relief for clients eager for their funds' return. However, it has sparked mixed market reactions. In 2022, Celsius revealed a post-bankruptcy Bitcoin mining strategy, which stirred dissatisfaction in court.
Celsius, a controversial crypto lending platform, has begun the process of recalling and rebalancing its crypto assets, including Ethereum (ETH), as it braces for future payouts to creditors. The lending company, grappling with bankruptcy court following filing for Chapter 11 status in July 2022, has initiated the movement of assets to ensure sufficient liquidity while anticipating asset distributions. The firm will also unstake its Ethereum holdings, a move that has previously brought significant staking reward income. The liberated Ethereum will serve to cover specific costs that have surfaced during the restructuring process, whilst creating a provision for timely creditor distributions.
This development is encouraging for Celsius clients who have been uncertain about the return of their investments for over a year and a half. As part of its recovery plan, Celsius maintains it would distribute Bitcoin (BTC) and/or Ethereum to its creditors. According to data from Blockchain analytics company Nansen, almost one-third of Ethereum in the pending withdrawal queue is presently owned by Celsius. The total amounts to a staggering 206,300 ETH, estimated to be worth around $468.5 million in the current market. On record is that 19,906 validators are in line for a complete exit, and so far, Celsius has withdrawn 40,249 Ethereum.
There are mixed reactions over this development. Some fear that the markets will be flooded with Ethereum, while others foresee a positive long-term impact. One comment was quoted as saying: "You guys don't grasp how much relief it will be for ETH when finally Celsius exits and shares what's remaining."
Celsius was among the multiple crypto lenders declared bankrupt amidst the 2022 crypto instability. Previously, the company had proposed a post-bankruptcy strategy of Bitcoin mining, an abrupt change that was met with dissatisfaction by the judge over the bankruptcy hearing.
Published At
1/5/2024 7:02:30 AM
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