Discover the crypto universe in depth

Celsius Begins Asset Reshuffling and Unstaking Ethereum

In an effort to restructure following its bankruptcy filing in July 2022, struggling cryptocurrency lending platform Celsius has started to reorganize its crypto assets, including Ethereum, in preparation for distributions to its creditors.

Unstaking Process of Ethereum

On January 5, Celsius announced that it had begun moving assets to “ensure sufficient liquidity” in preparation for asset distributions. This includes unstaking its existing Ether holdings, which have generated valuable staking income for the platform. The release of Ethereum aims to offset certain costs incurred throughout the restructuring process and free up ETH to ensure distributions to creditors.

The news is positive for Celsius clients who have been waiting for at least 18 months to recover their funds. Under the recovery plan, Celsius stated that it would distribute BTC and/or ETH to creditors. According to Nansen, a third of the ETH in the withdrawal queue currently belongs to Celsius, representing 206,300 ETH valued at approximately $468 million at current prices. While some have concerns that this move could “dump” Ether onto the markets, others suggest that it is a positive move for the long-term Ethereum markets.

Context and Celsius’ Strategy

Celsius was one of many crypto lending platforms to go bankrupt during the numerous crypto contagions of 2022. In November, the firm announced a post-bankruptcy strategy focused on Bitcoin mining, although the overseeing judge expressed discontent with the abrupt change.

The decision by Celsius to massively unstake its ETH is a significant step in its restructuring plan and will have considerable implications for creditors and potentially for Ethereum as a whole.

Related Posts