Celsius Initiates Asset Recall and Rebalancing for Creditor Distributions

Celsius, the beleaguered crypto lending platform, has officially commenced the recall and rebalancing of its crypto assets, including Ether. The move comes as part of the platform’s preparations for “timely distributions to creditors” amidst its ongoing bankruptcy proceedings.

Confirming the initiative on January 5, the crypto lending platform stated that the asset shifts are aimed at ensuring sufficient liquidity, a crucial aspect as the platform readies itself for potential asset distributions. The company plans to unstake its existing Ether holdings, which have been a source of valuable staking rewards income for the estate.

Celsius’s Liberated Ether to Offset Costs and Facilitate Distributions

The freed-up Ether resulting from the unstaking process will be utilized to offset certain costs incurred during the restructuring process. Moreover, it will play a key role in unlocking ETH to facilitate timely distributions to creditors, offering a positive outlook for customers who have been patiently awaiting the return of their funds for over 18 months.

Celsius outlined in its recovery plan that creditors would receive either Bitcoin or ETH. Notably, blockchain analytics firm Nansen revealed that nearly one-third of the ETH in the pending withdrawal queue belongs to Celsius, totaling a substantial 206,300 ETH, valued at approximately $468.5 million.

Concerns and Optimism Surrounding Asset Movements

While concerns have been raised about the potential impact of the asset movements on Ether markets, some observers express optimism, viewing it as a positive move for Ether in the long run. 

Celsius found itself among several crypto lenders grappling with bankruptcy during the crypto contagions of 2022. In November 2023, the company unveiled a scaled-back post-bankruptcy strategy, emphasizing a shift toward Bitcoin mining. However, the judge overseeing Celsius’s bankruptcy proceedings expressed dissatisfaction with the abrupt change, adding another layer of complexity to the platform’s journey.