Celsius Executes $125 Million Transfer to Crypto Exchanges in Repayment Drive

The NFT Unicorn Celsius_Ethereum Celsius Executes $125 Million Transfer to Crypto Exchanges in Repayment Drive Crypto News

Bankrupt lending firm Celsius has transferred over $125 million worth of its Ether to crypto exchanges in the past week as part of its initiative to repay creditors.

The move follows that of FTX and Alameda Research, which also resumed funds transfer earlier this month.

$125 Million ETH Transfer

From January 8 to January 12, $95.5 million was moved to Coinbase and $29.7 million to FalconX, as reported by Arkham Intelligence. Despite these transfers, Celsius still possesses more than 550,000 ETH, roughly valued at $1.36 billion.

The latest development comes almost ten days after the firm announced the unstaking 206,300 ETH, worth around $407 million, as part of its preparations for “timely distributions to creditors.”

The lending firm, entangled in bankruptcy court proceedings since filing for Chapter 11 in July 2022, had then cited the need to guarantee sufficient liquidity for potential asset distributions.

Besides Celsius, FTX and Alameda Research also started the process of moving funds to centralized exchanges.

In the past week, the two failed ventures by Sam Bankman-Fried conducted transfers totaling $28.2 million in digital assets, which included 402.6 Wrapped Bitcoin, 3,200 Ether, 602,000 Pendle, and 9.03 million People. FTX and Alameda still hold around $1.2 billion in assets on the Ethereum Virtual Machine (EVM).

Celsius’ Audacious Bid to Recover Funds

Celsius had recently proposed a bold measure involving users who cashed out more than $100,000 in the 90 days leading to the bankruptcy declaration.

Represented by Kirkland & Ellis, Celsius demanded that these users “resolve their outstanding liability” or face litigation, deeming the act of pre-bankruptcy withdrawals as “avoidance actions” eligible for pursuit in court.

The notice requires affected creditors to return 27.5% of their withdrawn amount by January 31, 2024, or risk clawback. This move was part of Celsius’ plan to repay creditors in line with the restructuring agreement, potentially allowing users with trapped assets to receive their due share.

The success and potential influence of this unique clawback initiative, aimed at recovering funds from private investors, are uncertain. If it succeeds, it could be a precedent for other struggling platforms attempting similar fund recovery measures.

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Source: CryptoPotato