Celsius Network is currently in bankruptcy and has been moving massive amounts of Ethereum (ETH) to Coinbase Prime, Paxos, and FalconX, shocking the cryptocurrency world. Here’s how the market reacted to the news.
Celsius Network’s ETH Tsunami: Whales Sweep Over $1 Billion Through Exchanges
Spotonchain report suggests that Celsius deposited 443,961 ETH, worth over $984 million, to Coinbase Prime, Paxos, and FalconX wallets on January 25. This followed a January 24 transfer of 575,081 ETH. According to blockchain intelligence firm Arkham, 13 transactions in an hour sent this large quantity of ETH to Coinbase and Paxos accounts. Celsius is still trying to pay its creditors despite its large Ethereum reserve.
The primary motivation behind these large whale transactions appears to be Celsius’s strategic move to ensure sufficient liquidity during its restructuring process. As anticipated by “Celsius NewCo Community” the company is gearing up for the distribution of assets to creditors, which is expected to commence in mid-February and remain open for a year. The distribution is a crucial step as part of the bankruptcy proceedings.
Reports from Celsius users also show that they have successfully withdrawn their assets from the platform. The company is taking steps to unlock Ethereum holdings by unstaking them, allowing for timely distributions to creditors. Right now Celcius holds 540,029 Ethereum (ETH), valued at $1.2 billion. However, recent data from Arkham Intelligence shows that Celsius sold over $125 million worth of ETH between January 8 and 12. A simple strategy to meet the debts and bankruptcy criteria.
While the exact reasons for these transfers are not explicitly stated, Spot on Chain speculates it might relate to an OTC deal. Celsius has previously mentioned utilizing corporate accounts for distributing cryptocurrencies through platforms like Coinbase. For example, for non-corporate accounts, the distribution plan involves using PayPal for creditors residing in the United States and Coinbase for those outside the U.S.
Also Read: OneCoin Fraudster Mark Scott Sentenced to 10 Years in Prison for Laundering $400 Million
ETH Price Impact
Looking at the current market scenario, Ethereum (ETH) is currently priced at $2,259, and it went up by 1.42% in the last 24 hours. However, over the past week, it went down by 11.33%. The amount of ETH being traded has also gone down a bit in the last day, totaling $14.3 billion. As of now, these large movements are shaking things up for crypto investors and how it will further affect the price barriers is unknown and speculation is that ETH may go down further in quest to cope with massive liquidity crunch.
