Cryptocurrency lending firm Celsius Network, currently operating under bankruptcy protection, has set up a crypto wallet with a total value of $25 million. According to blockchain firm Arkham Intelligence, their purpose may have been to allow Celsius escrow account holders to withdraw funds.
The assets transferred included $10.39 million worth of stablecoin USDC, $8.8 million in ether (ETH), $4.31 million in altcoins and $1.57 million in other stablecoins including Binance USD, DAI, Paxos dollar, and Gemini USD.
Celsius interim CEO Chris Ferraro said in court Wednesday morning that escrow account holders withdrew $17.7 million from the cryptocurrencies, with $3.5 million withdrawn. Others are done along the way. That number represents 60 percent of qualified custody users and 80 percent of the value of cryptocurrencies, he said.
Celsius was one of a number of high-profile crypto firms that collapsed last year amid the market turmoil. The lender halted user withdrawals in June and filed for Chapter 11 bankruptcy protection in July.
Celsius said on March 2 that it has opened up withdrawals to select escrow account holders, subject to certain restrictions, after obtaining approval from the U.S. bankruptcy court. According to court documents, Celsius has the right to distribute 94 percent of each eligible user’s custody assets.
However, Arkham reported that $13.62 million was withdrawn from the $25 million in funds, based on blockchain transaction data. Another $4 million withdrawn is likely to be Bitcoin (BTC), an analyst at Arkham revealed. However, the company has not previously tracked data on the Bitcoin blockchain, so the news cannot be confirmed.
Celsius’ wBTC Burning Operation
Celsius also destroyed around $500 million in wBTC at the end of February, Arkham reported. Each wBTC represents one BTC on the Ethereum blockchain. The lender sent over 20,000 wBTC in two batches to a separate address, and then forwarded the tokens to cryptocurrency exchange FalconX.
FalconX sends tokens to another account, which may be owned by a Celsius liquidator or counterparty. The organization then burned or otherwise bought back the original BTC tokens.
The strategy may be part of Celsius’ plan to consolidate its crypto assets in response to customer withdrawals of BTC. In August, the company ran a massive deficit in BTC holdings, owing approximately 105,000 BTC in client funds, while holding only 14,578 BTC and 23,348 wBTC on its balance sheet.
Celsius crypto wallets on Ethereum hold more than $1 billion in crypto assets, according to Arkham data. This does not include holdings on other blockchains, including recent BTC acquisitions on Bitcoin.
Celsius’ largest holdings are $638 million in Lido collateralized ether derivatives (stETH) and $251 million in Celsius’ CEL token.
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According to CoinDesk
