Troubled cryptocurrency lending company Celsius recently moved more than $125 million from Ethereum (ETH) to centralized exchanges. This action marks an important step in their efforts to repay creditors, after months of uncertainty since declaring bankruptcy in July 2022.
The context of the Celsius bankruptcy
In July 2022, Celsius declared bankruptcy, leaving thousands of creditors without access to their funds. Since then, the company has been working on a restructuring plan to pay off its debts. Recently, Celsius moved a significant portion of its ETH holdings, approximately $125 million, to centralized exchanges including Coinbase and FalconX in an effort to generate liquidity for these redemptions.
A significant reimbursement effort
Between January 8 and 12, Celsius transferred $95.5 million to Coinbase and $29.7 million to FalconX. Despite these moves, Celsius still holds over 550,000 ETH, valued at approximately $1.36 billion at press time. In preparation for the refunds, the company also withdrew a large portion of its staked ETH in early January, freeing up 206,300 ETH, valued at $407 million at the time.
The impact on the cryptocurrency market
Mass transfers of ETH from Celsius to exchanges have sparked concerns about possible selling pressure in the Ethereum market. However, these moves are also seen as a positive sign of the company's commitment to repaying its creditors. Meanwhile, other struggling companies, like FTX and Alameda Research, have also moved funds to exchanges, contributing to similar dynamics in the cryptocurrency market.
The future of creditor repayments
Celsius' plan calls for repaying creditors in Bitcoin (BTC) and Ethereum (ETH), although the exact date of the first repayments has not yet been communicated. Celsius' creditors have been waiting for their funds for over 18 months, and these recent ETH transfers indicate that the company is making progress toward resolving its obligations.
Conclusion
Celsius' transfer of $125 million in ETH to centralized exchanges represents a notable step forward in the process of repaying creditors. As the company continues to navigate its financial challenges, these actions show a determination to honor its debts and restore confidence in the cryptocurrency market.
