Defunct Crypto Lending Platform Celsius to Unstake and Sell $470 Million Worth of Ethereum (ETH)
Celsius, a former crypto lending platform, is set to unstake and potentially sell approximately $470 million worth of Ethereum (ETH), according to on-chain data.
Celsius, which is currently undergoing bankruptcy proceedings, previously offered customers the opportunity to earn yield on their crypto deposits.
However, the company collapsed after allegations of mishandling customer assets, resulting in the arrest and fraud charges against its founder, Alex Mashinsky.
As part of its effort to compensate its customers, Celsius is now liquidating its remaining assets. In a statement on the social media platform X, Celsius announced that it has initiated the unstaking process for its Ethereum holdings, which it has been using to generate income for its estate for the past year and a half.
Celsius stated, “In preparation of any asset distributions, Celsius has started the process of recalling and rebalancing assets to ensure ample liquidity. Celsius will unstake existing ETH holdings, which have provided valuable staking rewards income to the estate, to offset certain costs incurred throughout the restructuring process. The significant unstaking activity in the next few days will unlock ETH to ensure timely distributions to creditors. As a reminder, eligible creditors will receive in-kind distributions of BTC and ETH as outlined in the approved Plan.”
According to blockchain analytics platform Nansen, Celsius is currently waiting to unstake a total of 206,319 ETH, valued at nearly $470 million.
In late 2021, a judge approved a new plan from Celsius that aims to generate funds for a new mining and staking corporate spinoff known as “NewCo,” intended to repay creditors. NewCo is expected to have a balance sheet of $1.25 billion, $450 million of which will be in liquid crypto assets.
The court documents signed by Bankruptcy Judge Martin Glenn state, “NewCo intends to stake some or all of this liquid cryptocurrency to earn staking yields on the Ethereum network, which would generate anywhere from $10 to $20 million per year.”
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Analyst comment
Neutral news.
As Celsius unstakes and sells nearly half a billion dollars worth of Ethereum, it aims to compensate its customers and repay creditors. The unstaking activity will unlock ETH for timely distributions. The company plans to generate funds through a new mining and staking spinoff, which could generate $10 to $20 million per year. Market impact: Depending on the release of ETH into the market, there may be short-term price volatility, but the overall impact on the market is unlikely to be significant.
