Celsius exodus moving $320M in crypto to FTM while suspending the user withdrawals
Celsius is transferring more than a quarter of a billion dollars worth of funds from Aave into the FTX exchange for unspecified reasons. Moreover, suspending withdrawals for users.
Crypto staking and lending platform Celsius could tackle its rumoured liquidity crisis by unstacking $247 million worth of Wrapped Bitcoin from Aave and sending it to the FTX exchange.
Speculation is rife in the crypto community that the project is closing down withdrawals for users and transferring huge amounts of WBTC, ETH, and other crypto resources.
Celsius users are now critical of the platform for how they believe the project has mismanaged its funding following the collapse of the anchor protocol in the Terra Classic blockchain. The project could address those concerns with recent steps to stabilize liquidity.
Some believe that if Celsius fails, it will sell a significant stack of stacked ETH (stETH), causing it to fall further down the ETH. stETH is a token issued by the Lido Defi transaction platform as proof that a user has stacked ETH. It is currently trading about 4.4% lower than ETH.
The unusual token movement began at 18:00 ET from Defi Wallet, the head of Celsius, on June 12, when it began removing WBTC from the Aave Stacking and Lending platform, which Celsius used to charge interest on his deposit.
So far, 9,500 WBTC tokens valued at about $247 million have been cashed from Aave. Following a series of transactions, all of those tokens have been sent to the FTX exchange for a strange reason.
In addition to WBTC, it seems that 54,749 ETH worth about $74.5 million have been sent to FTX.
While such activity augurs very poorly for the transparency of Celsius until it clarifies the moves, the firm may be trying to confirm its liquidity is stable by replacing many of the unpredictable funds like WBTC and ETH it withdrew from Aave with stable coins.
Since June 12, Celsius has risked 204 million USDC stablecoins on Aave. It also has deposited 10 million USDC plus about 8.2 million DAI stablecoins to Compound, another Defi staking and lending platform.
The total 222 million stable coins re-staked by Celsius is nearly equal to the value of WBTC tokens it removed but still does not match the collective value of WBTC and ETH.
The Celsius team’s strategies with the cryptos that have been moved are still not clear. There is a real option that it could sell the assets it sent to FTX, but another likely option is that it means to stake the tokens they are sending to the exchange to earn yields.
As of the time of writing, Celsius has sent 9,500 WBTC, 54,749 ETH, 375,343 FTT worth $10 million, 2,455 MATIC ($1,158), 260,000 UNI ($1 million), 2 million Pax Dollars (USDP), and 300,000 TrueUSD (TUSD) stablecoins to FTX. However, token movements were still taking place by 23:00 ET.
Presently, Celsius users might be anxious enough because the platform paused withdrawals to “put Celsius in a better position to honour, over time, its withdrawal obligations,” as announced in a project on June 13.
“We are working with a singular focus: to protect and preserve assets to meet our obligations to customers.”
Cointelegraph reported in May that Celsius CEO Alex Mashinsky blamed the platform’s problems, including bankruptcy rumours, on Wall Street’s shadowy opportunists.
Crypto investors are largely disappointed with the new round of FUD coming from Celsius. The total crypto market cap has dropped 7.6% to $1.07 trillion over the past 24 hours. CEL, Celsius’s own token, has fallen more than 60% over the past 12 hours to $0.15. All price listings listed in the article came from the price tracker CoinGecko.
