Troubled cryptocurrency lending platform Celsius has confirmed it has begun recalling and rebalancing its crypto assets, including Ethereum, as it prepares "timely distributions to creditors."
On January 5, the lending company, which has been in bankruptcy court since filing for Chapter 11 bankruptcy protection in July 2022, said it had begun transferring assets to "ensure adequate liquidity" for any asset distribution. Be prepared.
Celsius added that it would be canceling its existing Ethereum holdings, “which provides Legacy with valuable staking reward income.”
It added that the released ether will be used to "offset certain costs incurred throughout the restructuring process" and "unlock ether to ensure timely distributions to creditors." The move is good news for customers who have been waiting at least 18 months to get their money back. Celsius says it will distribute Bitcoin under recovery plan or ETH to creditors.
Blockchain analytics firm Nansen reports that nearly a third of the ETH currently in the withdrawal queue belongs to Celsius.
That’s 206,300 ETH, worth about $468.5 million at current prices. It also reports that 19,906 validators are waiting to fully withdraw, while Celsius has withdrawn 40,249 ETH so far. While some are concerned that this move will “dump” Ethereum on the market, others believe that this will be a positive move for the Ethereum market in the long term:
“I don’t think you understand how much weight ETH will lose when the Celsius Vampires are eventually forgotten and what’s left is redistributed.” Celsius was one of several cryptocurrency lenders to go bankrupt during the 2022 cryptocurrency crisis.
In November 2023, the company announced a scaled-back post-bankruptcy strategy focused on Bitcoin mining. However, the judge presiding over the company's bankruptcy proceedings expressed displeasure at the sudden change.
