Celsius Recovers Over $400M in Staked Ethereum Collateral From Aave Loan

The struggling crypto lending platform Celsius has nearly cleared all of its outstanding DeFi debt after recovering 400,000 collateralized Staked Ethereum (stETH) from its loan on Aave.

The withdrawal amounts to $415 million in crypto that’s been saved from the risk of liquidation—almost a tenth of the asset’s $4.4 billion market cap.

As revealed through Nansen Portfolio tracker, the firm repaid $81.6 million in Circle’s USDC stablecoin to Aave on Tuesday. This reduced its outstanding debt to the protocol from $90 million to just $8.5 million.

The recovered asset, stETH (“staked ETH”) is a crypto derivative token stored with Lido. Though not technically “pegged,” its value tends to closely track that of ETH, which was trading for about $1,044 as of this writing.

The reclaimed funds join over 23,000 WBTC (worth about $440 million) recovered from Celsius’s former Maker loan, which was fully repaid last week.

Celsius quickly pivoted to paying down its Aave and Compound debt beginning on Monday, contributing a combined $95 million in stablecoins to loans across both protocols, according to Etherscan data.

The latest move brings the embattled lending platform’s total debt across DeFi protocols down to just $59 million at the time of this writing. Crypto data tracker Zapper shows that Celsius, in addition to the $8.5 million still owed on Aave, has some $50.3 million in DAI stablecoins on Compound. By paying off this debt, Celsius could recover another $227 million, further strengthening its liquidity.

It’s now been one month since Celsius became one of the first industry platforms to freeze user withdrawals—joined shortly thereafter by numerous firms, including CoinFLEX and Babel Finance—in response to bear market liquidity troubles.

Though recent developments may appear positive for Celsius and its customers, some details about its financial position remain hazy. For example, the firm hasn’t clarified where it’s sourcing its crypto to pay down its debts, leaving only its on-chain footprint to guide onlookers.

And a report from late June suggests that FTX CEO Sam Bankman-Fried passed up providing aid to Celsius after determining its balance sheet was beyond saving.

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