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Exodus from Celsius: $320 million in cryptocurrency delivered to FTX

13-Jun-2022 By: Shikha Jha
Exodus from Celsius:

Exodus from Celsius: $320 million in cryptocurrency 

delivered to FTX, user withdrawals halted

Celsius has transferred more than a quarter of a billion dollars from Aave to the FTX market for unknown reasons, as well as blocking withdrawals for users.

Celsius, a crypto staking and lending platform, may be addressing its suspected liquidity crisis by unstaking $247 million in Wrapped Bitcoin from aave and moving it to the FTX exchange. The project has been shifting enormous quantities of WBTC, ETH, and other crypto assets, as well as halting withdrawals for users, which has sparked speculation among the crypto community.

Following the failure of the Anchor Protocol on the now-named Terra Classic blockchain, many have chastised Celsius for how they believe the project squandered its cash. With recent measures to improve liquidity, the project could be addressing such worries.

Some believe that if Celsius fails, it will sell its large stack of staked ETH (stETH), causing it to depeg even more from ETH. stETH is a Lido DeFi lending platform token that serves as verification that a user has staked Ethereum. It is now selling at a 4.4 percent discount to Ethereum.

Unusual token transfers began on June 12 at about, when Celsius began removing WBTC from the Aave staking and lending platform, which Celsius utilised to earn interest on its deposits.

Aave has received 9,500 WBTC tokens valued around $247 million thus far. All of those tokens were sent to the FTX market for an unclear reason after a series of transactions. In addition to WBTC, 54,748 ETH worth $74.5 million appears to have been delivered to FTX.

While such action does not speak well for Celsius's transparency until it explains the movements, the firm may be attempting to ensure its liquidity is stable by substituting stablecoins for several of the volatile funds it removed from Aave, such as WBTC and ETH.

Celsius has staked 204 million USDC stablecoins on Aave since June 12. Compound, another DeFi staking and lending platform, has received 10 million USDC and around 8.2 million DAI stablecoins.

Celsius re-staked 222 million stablecoins, which is nearly equivalent to the value of WBTC tokens it deleted, but still falls short of the combined worth of WBTC and ETH.

The plans of the Celsius team for the cryptos that have been moved are yet unknown. It is possible that it may sell the assets it supplied to FTX, but it is also possible that it will stake the tokens it is sending to the exchange in order to earn dividends.

Celsius users may be gnashing their teeth right now since the platform has delayed withdrawals in order to "put Celsius in a better position to honour, over time, its withdrawal commitments," according to a project statement on June 13.

Alex Mashinsky, the CEO of Celsius, blamed shady Wall Street opportunists for the platform's issues, including reports of collapse.

The latest round of FUD from Celsius has generally disappointed crypto investors. Over the last 24 hours, the total crypto market cap has plummeted 7.6% to $1.07 trillion. Celsius's own token, CEL, has plunged more than 60% to $0.15 in the just 12 hours. All of the prices in this post were obtained from the price tracker CoinGabbar.

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