Embattled crypto lending platform Celsius has confirmed it has started recalling and rebalancing its crypto assets, including Ether (ETH), as it prepares for “timely distributions to creditors.”
On Jan. 5, the lending firm, which has been in bankruptcy court since its Chapter 11 filing in July 2022, stated that it has begun shifting assets to “ensure ample liquidity” in preparation for any asset distributions.
Celsius added that it will unstake its existing Ether holdings, “which have provided valuable staking rewards income to the estate.”
The liberated Ether will be used to “offset certain costs incurred throughout the restructuring process” and “unlock ETH to ensure timely distributions to creditors,” it added.
In preparation of any asset distributions, Celsius has started the process of recalling and rebalancing assets to ensure ample liquidity
— Celsius (@CelsiusNetwork) January 4, 2024
The move is positive news for customers waiting at least 18 months to get their funds back. Under the recovery plan, Celsius stated it would distribute Bitcoin (BTC) or ETH to creditors.
Blockchain analytics firm Nansen reports that almost a third of the ETH in the pending withdrawal queue currently belongs to Celsius.
This is a whopping 206,300 ETH valued at approximately $468.5 million at current prices. It also reported that 19,906 validators were waiting for a full exit and that Celsius has already withdrawn 40,249 ETH to date.
While some have shared worry that the move would “dump” Ether on the markets, others suggest that is a positive move for Ether markets in the long run:
“I don’t think you guys understand how much weight will be lifted off ETH when Celsius vampires finally fuck off into oblivion and redist what’s left.”
Related: Celsius grants access to withdrawals for eligible crypto holders
Celsius was one of several crypto lenders to go bankrupt during the crypto contagions of 2022.
In November 2023, the firm announced a scaled-back post-bankruptcy strategy focusing on Bitcoin mining. However, the judge presiding over the company’s bankruptcy proceedings voiced displeasure regarding the abrupt change.
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