Celsius Shifts $125 Million in Ethereum to Exchanges Concurrently with FTX and Alameda Liquidations

In recent weeks, the embattled crypto sector has witnessed more turmoil as lending firm Celsius Network and bankrupt exchange FTX move significant amounts of cryptocurrency holdings to centralized platforms, likely to raise funds for creditor repayment plans. Celsius, which filed for Chapter 11 bankruptcy protection in July 2022 after halting withdrawals, has transferred over $125 million worth of Ether (ETH) to top exchanges Coinbase and FalconX between January 8-12, according to on-chain analytics firm Arkham Intelligence.

The bankrupt lender shifted $95.5 million in ETH to Coinbase while moving $29.7 million to FalconX. However, Celsius still retains a sizable 550,000 ETH worth around $1.36 billion at the time of reporting. In early January, Celsius unstacked a massive 206,300 ETH valued at around $407 million back then from the Ethereum network, stating the freshly retrieved coins would aid the restructuring costs and repaying creditors through its recovery program. While Celsius plans to distribute Bitcoin (BTC) and ETH to owed parties, it has yet to provide a precise date for when repayments may start. Creditors have waited over 18 months to receive funds stuck on the bankrupt platform since July 2022.

FTX and Alameda Also Transfer Assets

Celsius wasn’t the only struggling company transferring cryptocurrencies, as data shows that collapsed exchange FTX and its defunct trading firm Alameda Research moved $28 million in digital coins to top exchanges on January 14. The amounts comprised $18.7 million worth of Wrapped Bitcoin, $8 million of ETH, and $1 million of Pendle sent to Coinbase and Binance. FTX filed for Chapter 11 protection in November 2022 following its implosion. FTX administrators have recouped about $7 billion in assets, with $3.4 billion in cryptocurrency. The exchange aims to raise funds through such routes to repay customers and creditors, though no specific repayment date has been provided yet. FTX estimates repayments starting sometime in 2024.

Industry Experts Analyze Moves

Cryptocurrency analysts note Celsius and FTX moving sizable holdings to major exchanges likely seeks to generate liquidity through selling portions to address creditor claims. “Transferring large volumes of relatively more liquid cryptocurrencies like ETH and WBTC to centralized trading platforms enables them to potentially sell parts of these reserves over time to centralized platforms, helping gather funds for the multi-step repayment process,” stated Moshe Hogeg, CEO of crypto investment firm Pie Insurance.

Others believe such transfers serve to assess accurate market valuations of holdings as bankruptcy proceedings move ahead. “Capturing a sense of what these assets could reasonably fetch in present market conditions helps establish repayment estimates and distribution schedules for the many parties owed,” noted Hester Peirce from Coinbase. Most experts agree Celsius and FTX face an uphill battle repaying all customers, given the depths of losses across the crypto economy in 2022. However, the gradual selling of remaining reserves at reasonable prices over the upcoming years may ultimately allow reimbursing significant portions to claimants.