Bankrupt cryptocurrency lender Celsius Network plans to stake its Ethereum (ETH) holdings as it prepares to repay its creditors.
Celsius announced on social media that it plans to unstake its existing ETH holdings to “ensure ample liquidity” to repay its investors.
206,300 ETH Currently in Staking Withdrawal Queue
Bankrupt crypto lender Celsius Network confirmed on X (formerly Twitter) that it started the process of recalling and rebalancing assets to repay its creditors. Celsius explained part of that process involves unstaking ETH holdings.
In a thread, the lender said:
“In preparation of any asset distributions, Celsius has started the process of recalling and rebalancing assets to ensure ample liquidity.”
Continuing;
“Celsius will unstake existing ETH holdings, which have provided valuable staking rewards income to the estate, to offset certain costs incurred throughout the restructuring process.”
The lender added:
“The significant unstaking activity in the next few days will unlock ETH to ensure timely distributions to creditors.”
According to blockchain analytics firm Nansen, Celsius has 206,300 ETH estimated to be worth a whopping $468.5 million pending withdrawal. Nansen reports almost a third of the ETH pending withdrawal belongs to Celsius.
Source: Nansen
Celsius’ Downfall
Celsius filed for bankruptcy in 2022 after suspending customer withdrawals. The bankruptcy filing came after it emerged the lender had a $1.2 billion hole in its balance sheet. The company’s co-founder and former CEO, Alex Mashinsky, was arrested and sued by regulators in July 2023. Mashinsky and others were charged with several counts of securities, commodities, wire fraud, and conspiracy charges to manipulate $CEL, Celsius’s native token.
Restructuring Plan Approved, Celsius Cleared to Exit Bankruptcy
The lenders’ “significant” unstaking event will give the company the liquidity it needs to repay its creditors as part of its restructuring plan. In November, Judge Martin Glenn cleared Celsius to exit bankruptcy after approving its restructuring plan.
According to its restructuring agreement, Celsius will repay its customers using crypto assets and stock in a new publicly listed Bitcoin mining company.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Source: https://cryptodaily.co.uk/2024/01/celsius-will-unstake-470-million-in-ether-eth-to-ensure-ample-liquidity