Celsius Initiates $125M Ethereum Transfer: Are Creditor Repayments Finally Imminent?

For Celsius creditors who have been in limbo since July 2022, there’s finally a glimmer of hope. The embattled crypto lender, Celsius Network, has recently made a significant move, transferring over $125 million worth of Ethereum (ETH) to various cryptocurrency exchanges. Could this be the signal everyone has been waiting for – the commencement of creditor repayments?

What Exactly Happened? The $125M ETH Transfer Breakdown

Data from Arkham Intelligence, a crypto analytics platform, reveals a flurry of activity between January 8th and 12th. Celsius strategically moved substantial amounts of ETH to prominent exchanges:

• Coinbase: Received approximately $95.5 million in ETH.
• FalconX: Received around $29.7 million in ETH.

Celsius is preparing to distribute ETH to creditors and has sent $125M to exchanges over the past few days. pic.twitter.com/5n2i5tNwjg

— Arkham (@ArkhamIntel) January 13, 2024

This significant transfer suggests Celsius is actively preparing to distribute assets to its creditors, a long-awaited step in the bankruptcy proceedings.

Celsius’s Crypto Holdings: Still a Whale in the Market?

Despite the substantial ETH movement, it’s important to note that Celsius remains a significant holder of crypto assets. As of now, their holdings include:

• Ethereum (ETH): Over 580,000 ETH, valued at roughly $1.47 billion.
• Bitcoin (BTC): 9,799 BTC, worth approximately $417.67 million.

These figures underscore the scale of Celsius’s operations and the complexity of its bankruptcy restructuring.

Unstaking Millions: Laying the Groundwork for Repayments

Adding to the repayment narrative, Celsius made headlines on January 5th by unstaking a massive 206,300 ETH, valued at around $470 million. This unstaking operation was explicitly stated to be for:

• Restructuring Expenses: Covering costs associated with the ongoing bankruptcy proceedings.
• Creditor Repayments: Preparing funds for distribution to creditors.

This unstaking event further solidified the anticipation of imminent repayments.

Market Reactions: Will This ETH Movement Impact Prices?

The crypto community has reacted with a mix of anticipation and caution to Celsius’s ETH movements. Here’s a snapshot of the differing perspectives:

The actual market impact remains to be seen, and it will likely depend on the pace and method of ETH distribution.

The Long Wait: 18 Months and Counting for Celsius Creditors

It’s been a long and arduous wait for Celsius creditors. It’s been over 18 months since Celsius initially froze withdrawals and declared bankruptcy in July 2022. The bankruptcy filing was triggered by a severe liquidity crisis during a broader crypto market downturn.

Since then, Celsius has been navigating the complex legal process of Chapter 11 bankruptcy, aiming to create a settlement plan that works for all stakeholders. Currently, a plan is in place allowing qualified users to withdraw 72.5% of their crypto holdings until February 28th. Court documents from September indicated that roughly 58,300 users had around $210 million in assets classified as “custody assets.”

FTX and Alameda Also on the Move: Are We Seeing a Trend?

Interestingly, Celsius isn’t the only entity linked to past crypto turmoil making significant asset transfers. Companies associated with Sam Bankman-Fried’s collapsed crypto empire, FTX and Alameda Research, have also been actively moving funds to centralized exchanges.

Last week, these entities transferred digital assets worth $28.2 million, including:

• 402.6 Wrapped Bitcoin (WBTC)
• 3,200 Ethereum (ETH)
• 602,000 Pendle (PENDLE)
• 9.03 million PEOPLE (PEOPLE)

🚨 FTX/Alameda are moving assets again!

In the past 2 days,
– Transferred out $28.2M worth of assets including $WBTC, $ETH, $PENDLE, $PEOPLE
– Mainly deposited to @coinbase and @binance

Currently holding ~$1.2B in EVM assetshttps://t.co/qqyEhHk7Jx pic.twitter.com/l4txale78v

— Spot On Chain (@spotonchain) January 9, 2024

FTX and Alameda still hold a substantial $1.2 billion in EVM assets. These movements, similar to Celsius’s, are believed to be preparations for asset sales aimed at compensating their own affected customers.

$400 Million Token Unlock on the Horizon: What’s Next for the Market?

Adding another layer of potential market influence, crypto analytics platform CryptoRank highlights that a significant $407.7 million worth of digital assets from various projects are scheduled for token unlocks soon.

🚨 Upcoming Token Unlocks This Week

In the next 7 days, $407.7M worth of tokens will be unlocked from 7 projects.

Top unlocks by value:
$BITDAO – $147.74M
$SEI – $88.09M
$UNI – $55.54M
$ACE – $38.53M
$LDO – $28.48M
$AXS – $27.15M
$APE – $22.48M#tokenunlock #cryptounlock pic.twitter.com/jXz5yJ974w

— CryptoRank Platform (@CryptoRank_io) January 14, 2024

Leading the pack is BitDAO (BITDAO), set to release 172.98 million tokens (1.8% of its total supply), valued at $147.74 million. Other notable token unlocks include:

• SEI (SEI): $88.09 million
• Uniswap (UNI): $55.54 million
• ACE (ACE): $38.53 million
• Lido DAO (LDO): $28.48 million
• Axie Infinity (AXS): $27.15 million
• ApeCoin (APE): $22.48 million

These upcoming token unlocks, combined with the Celsius and FTX/Alameda asset movements, are poised to introduce further dynamics into the crypto market in the coming weeks. Investors and creditors alike will be closely watching how these events unfold and their potential impact on asset prices and market sentiment.

Conclusion: A Step Forward for Celsius Creditors?

Celsius’s $125 million ETH transfer to exchanges is undoubtedly a significant development. While the exact timeline for creditor repayments remains undisclosed, this move strongly suggests that the process is gaining momentum. For long-suffering Celsius creditors, this news offers a tangible sign of progress and a renewed sense of hope that the return of their funds may finally be on the horizon. However, the potential market impact of these large ETH movements and the broader token unlock event warrants careful observation in the days and weeks to come.