Bankrupt Lending Firm Transfers Over $125 Million Worth of Ether to Crypto Exchanges

In a bid to repay its creditors, the bankrupt lending firm Celsius has made a substantial transfer of over $125 million worth of Ether to various crypto exchanges. This move follows in the footsteps of FTX and Alameda Research, who also resumed fund transfers earlier this month.

Moving Funds to Coinbase and FalconX

Between January 8 and January 12, Celsius transferred $95.5 million to Coinbase and $29.7 million to FalconX, as reported by Arkham Intelligence. This transfer, however, has not depleted Celsius entirely, as the firm still possesses more than 550,000 ETH, valued at approximately $1.36 billion.

This latest development comes nearly ten days after Celsius announced the unstaking of 206,300 ETH, amounting to about $407 million. This action was taken to ensure the availability of sufficient liquidity for potential asset distributions to the creditors.

In addition to Celsius, FTX and Alameda Research have also initiated the process of moving funds to centralized exchanges. Over the past week, these two ventures, helmed by Sam Bankman-Fried, transferred a total of $28.2 million in digital assets. This included 402.6 Wrapped Bitcoin, 3,200 Ether, 602,000 Pendle, and 9.03 million People. FTX and Alameda still hold approximately $1.2 billion in assets on the Ethereum Virtual Machine (EVM).

Celsius recently proposed an audacious measure regarding users who cashed out more than $100,000 in the 90 days leading up to the bankruptcy declaration. Represented by Kirkland & Ellis, Celsius demands that these users “resolve their outstanding liability” or face litigation. Celsius considers pre-bankruptcy withdrawals as “avoidance actions” eligible for pursuit in court. Affected creditors must return 27.5% of their withdrawn amount by January 31, 2024, or risk clawback.

Repaying Creditors and Trapped Assets

This measure by Celsius is part of its plan to repay creditors in accordance with the restructuring agreement. If successful, it could potentially enable users with trapped assets to receive their rightful share. However, the success and influence of this unique clawback initiative, aimed at recovering funds from private investors, remains uncertain. Its outcome may set a precedent for other struggling platforms seeking similar fund recovery measures.