Table of Contents
Cryptocurrency Lender Celsius Network Unveils Strategy to Boost Liquidity and Expedite Fund Return to Creditors
In a significant development amid its ongoing bankruptcy proceedings, cryptocurrency lender Celsius Network has announced plans to unstake its existing Ethereum holdings. The move, disclosed on Jan. 5, is aimed at securing ample liquidity in preparation for the potential distribution of funds to creditors. Celsius, entangled in Chapter 11 bankruptcy since July 2022, is taking steps to cover restructuring costs and hasten the return of funds to its waiting creditors.
Positive Outlook for Celsius Customers
Celsius customers, who have endured a prolonged wait for the return of their funds, may find relief in this strategic decision. As per Celsius’ recovery plan, creditors are slated to receive Bitcoin (BTC) and/or Ethereum as part of the settlement.
In preparation of any asset distributions, Celsius has started the process of recalling and rebalancing assets to ensure ample liquidity
— Celsius (@CelsiusNetwork) January 4, 2024
Blockchain analytics firm Nansen reported that Celsius currently holds approximately 32% of the Ether pending withdrawal, totaling 206,300 ETH, valued at around $468.5 million.
Balancing Act for Ethereum Market
While the large-scale unstaking of Ethereum by Celsius raises concerns about potential negative impacts on its market value, some experts believe it could, in fact, bolster Ethereum’s long-term prospects. The unfolding situation is being closely watched by market participants as Celsius progresses through its restructuring.
Crisis Origins and Restructuring Efforts
Celsius Network’s journey into bankruptcy began in July 2022, triggered by a liquidity crisis stemming from the downturn in the crypto market. This crisis led to the freezing of withdrawals and ultimately resulted in the Chapter 11 bankruptcy filing in the U.S. Bankruptcy Court for the Southern District of New York. Celsius has since been diligently working on a settlement plan, allowing qualified users to withdraw 72.5% of their crypto holdings until Feb. 28. Court documents from September reveal that around 58,300 users held a total of $210 million in assets classified as “custody assets.”
Founder’s Legal Troubles Continue
Meanwhile, Alex Mashinsky, the founder and former CEO of Celsius Network, remains entangled in legal troubles. Currently released on bail after being arrested on fraud charges, Mashinsky is scheduled for trial on Sep. 17. The unfolding events surrounding Celsius Network continue to captivate the crypto community and highlight the challenges faced by cryptocurrency platforms in the volatile market landscape.
For any queries or suggestions please leave a comment or contact us here.
Thank you,
