Celsius Moves $125M Of ETH Amidst Plans To Repay Creditors

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Bankrupt crypto lender Celsius has moved $125 million worth of ETH to crypto exchanges as part of the embattled platform’s initiative to repay creditors.

The move by Celsius comes after FTX and Alameda Research resumed the transfer of funds earlier this month. 

Celsius Begins Transfer Of ETH 

Between the 8th and 12th of January, Celsius moved $95.5 million worth of ETH to Coinbase and $29.7 million worth of ETH to FalconX. These transfers were also reported by Arkham Intelligence. Despite these large transfers, Celsius still holds over 550,000 ETH, which is valued at roughly $1.36 billion. 

“Looks like Celsius took the opportunity to unload >$125M of ETH over ETF Week. In the past week, they’ve deposited $95.5M to Coinbase and sent $29.73M to FalconX. They still have $1.4 billion (540K ETH) remaining.”

The development comes just ten days after the firm announced it was unstaking around 206,300 ETH, worth around $407 million, as it geared up to prepare for “timely distribution to its creditors.” Celsius claimed the unstaked ETH would be used to pay for costs that were incurred through its restructuring process as it prepares to repay its creditors. The firm has been embroiled in bankruptcy proceedings since it filed for Chapter 11 bankruptcy in July 2022 and cited the need to guarantee sufficient liquidity for any potential asset distribution. 

Celsius’ Attempts To Recover Funds 

Celsius recently proposed a bold move to recover funds involving users who cashed out over $100,000 in the 90 days leading up to the firm’s bankruptcy declaration. Through its attorneys, Kirkland & Ellis, Celsius demanded that these users resolve their outstanding liability or face litigation. The firm deemed pre-bankruptcy withdrawals as avoidance actions that were eligible to be pursued in court. 

The notice requires affected users to return 27.5% of their withdrawn amount by the 31st of January, 2024m, or risk the prospect of clawback. The move was part of Celsius’ plan to repay creditors in line with the firm’s restructuring agreement and potentially allow users with trapped assets to receive their due. 

However, the success and influence of such a clawback initiative still need to be determined. If such a measure is successful, it could set a precedent and could see other struggling platforms adopt similar methods to recover funds. 

Other Firms Moving Funds 

Celsius was not the only firm to move its crypto holdings to centralized exchanges. On the 14th of January, bankrupt cryptocurrency exchange FTX and its defunct trading arm Alameda Research transferred around $28 million worth of crypto to centralized exchanges. These transfers were confirmed by blockchain analytics firm Spot On Chain. The transfers made by the firms included $8 million worth of ETH, $18.7 million worth of Wrapped Bitcoin, and $1 million worth of PENDLE to Coinbase and Binance. 

FTX and Alameda Research declared bankruptcy in November 2022, with FTX looking to raise funds to repay its creditors. So far, administrators at FTX have reclaimed around $7 billion in assets, which includes $3.4 billion in crypto.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.