Celsius is a crypto lending platform that acts like a traditional bank for cryptocurrency rather than fiat currency. Recently, Celsius has announced that they are pausing all its withdrawals, Swap, and transfers between accounts. They claim they’re taking this proactive action to stabilize liquidity and operations and protect their users’ assets.
According to the latest crypto market news, Celsius has transferred $500 million in Wrapped Bitcoin to FTX. As per the blockchain transaction data of Celsius, they had sent around 24,463 WBTC to the FTX in various steps. Reports say that Celsius has also reclaimed 21,963 wrapped bitcoin tokens after paying all its debts. Last Tuesday, they also redeemed 2,000 WBTC installments of the collateral. Even though, a debt of $82 million still remains between Celsius and Maker.
Celsius Moves $500 Million In Bitcoin Futures Contracts To A Cryptocurrency Exchange After Paying Off Its Debt
After the announcement of freezing all withdrawals and transfers by the Celsius Network, this year has become more difficult and challenging for cryptocurrency investors and traders. Celsius Network had 1.7 million subscribers and $11.7 billion in assets under control as of May 17, 2022, according to reports. The business has lent $8 billion and promises 18% yearly returns on cryptocurrency deposits.
After the collapse of cryptocurrency sisters, Luna and Terra USD, negative sentiments is surrounding the crypto market. Following this, crypto investors were concerned regarding the potential crypto market contagion that’s spreading on various crypto platforms. An adjunct professor at the Columbia Business School, Omid Malekan said that “Their potential insolvency matters to all crypto investors because they were a major player who had assets deployed on multiple DeFi protocols on different blockchains. If it is forced into full-on liquidation, then the withdrawal of those assets may begin a chain reaction of falling prices and forced liquidations for other DeFi users”.
Walter Teng, the analyst at Fundstrat said, “Celsius’s de-leveraging activity on-chain will add sell-side pressure to assets that have been used as collateral including WBTC, which has been the firm’s largest holding pledged against its decentralized finance loans”.
After full reimbursement, Celsius Network’s wallet was no longer in jeopardy of liquidation. As per the reports, as of May 12, around $700 Bitcoin could have liquidated the vault. After May 12, Celsius Network incorporated WBTC and DAI to strengthen collateralization and avoid liquidation.