Celsius Wallet Deposits $36M Ethereum to Exchanges Amid Restructuring

In a noteworthy development, a wallet linked to the now-defunct Celsius crypto lending platform deposited approximately $36 million worth of Ethereum (ETH) into cryptocurrency exchanges. This move was observed on Monday and reported by the crypto tracker Lookonchain.

Celsius' Ethereum Deposits: A Closer Look

Lookonchain highlights a $30.34 million ETH deposit to Coinbase and an additional $5.13 million ETH to FalconX. Notably, Celsius' two staking wallets still retain a substantial 557,081 Ethereum, valued at around $1.3 billion.

Celsius' Financial Struggles: A Recap

Celsius faced a financial downfall, leading to its bankruptcy filing in July 2022, triggered by a 99% plunge in its native token, CEL. The platform encountered challenges meeting withdrawal demands. Founder Alex Machinsky's subsequent arrest and fraud charges in the U.S., coupled with a lawsuit from the SEC, intensified the company's predicament.

Recovery Efforts: NewCo and Asset Redistribution

Despite its challenges, Celsius secured court approval for a restructuring plan. This plan introduces "NewCo," a corporate spinoff designed to generate funds for mining and staking. NewCo's balance sheet is set at $1.25 billion, including $450 million in liquid crypto, aimed at repaying creditors.

Unstaking Process and Asset Management

Celsius initiated the unstaking process for its Ethereum holdings, previously utilized for income generation. This strategic move involves recalling and rebalancing assets to ensure sufficient liquidity. The company plans to unstake existing ETH holdings, which have historically contributed to valuable staking rewards, to offset restructuring costs.

Timely Distributions to Creditors

In preparation for asset distributions, Celsius aims to unlock ETH through significant unstaking activity in the coming days. This approach ensures timely distributions to eligible creditors. Celsius emphasizes that eligible creditors will receive in-kind distributions of BTC and ETH as outlined in the approved plan, marking a step towards resolving financial obligations.

While Celsius navigates through its restructuring phase, challenges persist. The company's commitment to addressing creditor concerns is evident, yet the path to recovery remains intricate and demanding.