Crypto lender Celsius to unstake $470M in Ether ahead of repayments

The crypto lender has 206,300 Ether currently in the staking withdrawal queue, according to Nansen.

Crypto lending platform Celsius, currently facing challenges, has officially commenced the recall and rebalancing of its crypto assets, including Ether (ETH), in anticipation of “timely distributions to creditors.” In a statement on January 5, the platform, embroiled in bankruptcy proceedings since its Chapter 11 filing in July 2022, disclosed the initiation of asset shifts to “ensure ample liquidity” for potential distributions.

Celsius clarified its intention to unstake its existing Ether holdings, which have generated significant staking rewards income for the estate. The freed-up Ether will be utilized to “offset specific costs incurred during the restructuring process” and “unlock ETH to facilitate prompt distributions to creditors.”

This development is positive news for customers who have been patiently waiting for over 18 months to recover their funds. As part of the recovery plan, Celsius outlined its commitment to distribute Bitcoin (BTC) or ETH to creditors.

According to blockchain analytics firm Nansen, nearly one-third of the ETH in the pending withdrawal queue is attributed to Celsius, totaling a substantial 206,300 ETH, valued at around $468.5 million at current market prices. The report also highlighted that 19,906 validators were awaiting a complete exit, with Celsius having already withdrawn 40,249 ETH to date.

While concerns have been raised about the potential market impact of this move, with fears of a significant Ether “dump,” some view it as a positive development for the long-term health of Ether markets. One commentator expressed relief, stating, “I don’t think you guys understand how much weight will be lifted off ETH when Celsius vampires finally fade away into oblivion and redistribute what’s left.”

Celsius was among several crypto lenders that faced bankruptcy during the crypto contagions of 2022. In November 2023, the firm announced a scaled-back post-bankruptcy strategy, focusing on Bitcoin mining. However, the presiding judge overseeing the bankruptcy proceedings expressed dissatisfaction with the abrupt change in direction.