- Celsius has sent more Ethereum (ETH) to Coinbase.
- The bankrupt crypto lender may not sell all its exchange deposits despite fears.
- The moves come as Celsius is expected to launch asset distribution to customers and creditors soon.
Despite the recent crypto market recovery recorded in 2023, the unwinding of assets tied to crypto firms that went under in the 2022 bear market has continued to loom large over the market.
In November 2023, Celsius, one of the bankrupt firms, gained approval to proceed with restructuring plans that required a $75 million wind-down budget and about $225 million in fiat to capitalize a new creditor-owned mining firm. Following the plan’s approval, crypto market participants braced for the selling pressure, anticipating massive sell-offs in Ethereum (ETH), the firm’s most significant holding, amid efforts to raise the capital.
Beyond the $300 million mark, however, the firm’s ETH exchange deposits have not slowed down, sparking further concern about a continued sell-off.
Celsius Strikes Again?
In the past 24 hours, Celsius has moved another 18,000 ETH worth approximately $40 million to Coinbase, bringing its total ETH transfer to exchanges, including FalconX and OKX, since the approval of its restructuring plan near 281,000 ETH (about $621 million), twice the selling volume most market participants anticipated.
The #Celsius wallet deposited 18K $ETH($40M) to #Coinbase again 12 hours ago.#Celsius has deposited a total of $280,760 $ETH($621M) to #Coinbase, #FalconX, and #OKX since Nov 13.
And #Celsius currently holds 540,029 $ETH($1.2B).https://t.co/3gGOucC9gY pic.twitter.com/cNxa0Wgd73
— Lookonchain (@lookonchain) January 24, 2024
With the firm holding at least 550,000 ETH worth over $1.2 billion at current rates, according to Arkham Intelligence data at the time of writing, market participants are understandably concerned.
Is Celsius Network Selling All Its Ethereum (ETH)?
Despite the concerns, Celsius is unlikely to sell all its ETH as some fear. Per the firm’s recently approved restructuring plan, it is committed to settling most creditor claims, including an estimated $2.1 billion allocation to retail customers, with a mix of liquid crypto assets like Bitcoin (BTC), ETH, and Tether (USDT).
Contrary to the broad market perception, in line with this plan, Celsius may not be selling all of its exchange deposits, particularly its Coinbase deposits, since January 5. At the time, the bankrupt lender noted that it would be unstaking ETH to ensure timely distribution. The firm’s restructuring plan names Coinbase as a distribution partner.
When Will Distribution Start?
While Celsius’ restructuring plan intends to see the firm exit bankruptcy by Q1 2024, it is unclear when it will start distributing assets to creditors and customers. However, some speculate that it could begin as early as the end of January 2024.
celsius distributions planned for jan 31 also
— Fabian D. (@_FabianHD) January 16, 2024
At its peak, Celsius was a leading crypto lender valued at over $3 billion. However, following the crypto market collapse hastened by the Terra Luna crash, the firm was revealed to be “deeply insolvent” amid shady finance and risk management practices. At the time, the firm had 600,000 customers who held about $4.4 billion in assets on the platform.
On the Flipside
- Former Celsius customers have expressed concerns about the capabilities of US Bitcoin, the firm assigned to manage the new creditor-owned Bitcoin mining firm. The concerns come as some argue that the firm is presently in a weakened financial position.
Why This Matters
Celsius’ continuous Ethereum exchange deposits have sparked concerns of significant selling pressure on the asset among investors.
Read this for more on Celsius’ Ethereum transfers:
Celsius Network Moves ETH Worth $125M: Is a Sell-off Looming?
Find out what Chainlink Automation brings to Base:
Here’s What Chainlink Automation Brings to Coinbase’s Base
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