May 20, 2024

Celsius Initiates Altcoin Liquidation: Transfers $63 Million Worth of Crypto for Debt Settlement

Celsius Initiates Altcoin Liquidation: Transfers $63 Million Worth of Crypto for Debt Settlement

In a bid to manage its financial predicament, Celsius has begun the process of selling off its altcoin holdings. The company has received the green light from a US bankruptcy judge to convert these altcoins into Bitcoin (BTC) and Ethereum (ETH).

Celsius had previously refrained from making any asset-related on-chain movements during this difficult period. However, this stance changed last Wednesday when it opted to withdraw over $60 million in tokens from cold storage, utilizing Fireblocks’ services.

Fireblocks is a blockchainsecurity service provider for moving, storing, and issuing digital assets. Fireblocks streamlines operations by bringing all exchanges, OTCs, counterparties, hot wallets, and custodians into one platform.

These assets were then moved to FalconX, an intermediary platform that assisted in their subsequent transfer to the renowned cryptocurrency exchange, Binance.

As of this morning, Celsius has been actively moving cryptocurrency funds to FalconX, an institutional exchange. Blockworks reports that the total value of these transfers has hit $63.3 million.

There are concerns among analysts that Celsius’ ongoing liquidations could negatively impact cryptocurrency prices, especially for the assets involved in the rapid sell-off. Chainlink (LINK), one of Celsius’ altcoin holdings, is speculated to face the most significant selling pressure among the assets being liquidated. However, at the time of writing, LINK is trading at $7.14 on Coingecko, showing a 6.6% increase over the past 24 hours.

Interestingly, other coins in Celsius’ remaining crypto portfolio have seen positive price movements. Tokens such as COMP, SUSHI, and 1INCH have recorded gains.

However, not all assets have performed well, with BNT, KNC, AAVE, SNX, and MATIC all trading in the red, indicating a drop in their respective prices.

In July 2022, the company found itself in a severe financial crisis, leading it to file for bankruptcy protection. This decision was a response to a deficiency in customer funds, which temporarily halted withdrawals. This development significantly impacted Celsius and its operations.

Further complicating matters, the US Department of Justice (DOJ) recently made news with the arrest of Celsius’s former CEO, aka ‘Would-Be Warren Buffet of Cryptocurrency‘ Alex Mashinsky.

Last week, Bloomberg reported that Mashinsky is facing multiple charges, including securities fraud, commodities fraud, and wire fraud. The arrest of the former CEO adds to the challenges the company faces as legal proceedings and investigations continue.

The bankruptcy filing and Mashinsky’s arrest have cast a cloud of uncertainty over Celsius and its future. These events have undoubtedly created a complex and challenging situation for the company.

The impact of these developments on Celsius’s stakeholders and the broader cryptocurrency community is yet to be determined.