Blockchain analytics firm Nansen reports that almost a third of the ETH in the pending withdrawal queue belongs to Celsius, totaling 206,300 ETH valued at approximately $468.5 million at current prices.
Celsius Network, a once prominent but bankrupt crypto lender, has announced plans to unstake a substantial amount of Ethereum (ETH) in the coming days to offset costs incurred during its restructuring process. This decision comes after the company filed for Chapter 11 bankruptcy protection in July 2022, following a liquidity crisis triggered by the volatile crypto market.
The Celsius Network Ethereum Unstaking Plans
Celsius Network revealed in a follow-up post on X that “the significant unstaking activity in the next few days will unlock ETH to ensure timely distributions to creditors”. The Ethereum holdings, previously staked by the company, have served as an income stream to offset costs incurred during the restructuring process.
This development is particularly welcomed by customers who have patiently awaited the return of their funds for over 18 months. According to the firm, as part of the recovery plan, Bitcoin (BTC) or Ethereum will be distributed to the creditors.
Blockchain analytics firm Nansen reports that almost a third of the ETH in the pending withdrawal queue belongs to Celsius, totaling 206,300 ETH valued at approximately $468.5 million at current prices. While concerns have been raised about potential market impact due to a large sell-off, some view the move as positive for the Ethereum markets in the long run.
In November 2023, Celsius Network outlined a scaled-back post-bankruptcy strategy focusing on Bitcoin mining. The plan to shift towards Bitcoin mining, however, has faced skepticism from some creditors, and regulatory hurdles still need to be cleared, including approval from the US Securities and Exchange Commission (SEC).
At the time, Celsius acknowledged the regulatory requirements and mentioned that if the mining venture doesn’t proceed, an alternative plan for liquidation may be implemented. However, with a settlement plan approved by a Federal Judge, Celsius Network has allowed qualified users to withdraw 72.5% of their crypto until Feb. 28.
According to court filings from September, approximately 58,300 users held $210 million in what the court categorized as “custody assets.” The move is seen as a step towards fulfilling the commitments made under the recovery plan.
Celsius’ Founder’s Legal Troubles
Meanwhile, the founder and former CEO of Celsius Alex Mashinsky, who is facing fraud charges and is currently out on bail, is scheduled for a jury trial on September 17. Though, with less impact, his legal situation adds another layer of complexity to Celsius Network’s already difficult journey.
In December, Celsius Network entered into an interim agreement with Bitcoin mining company Hut 8. The agreement involves Hut 8 constructing and deploying new mining operation centers in Cedarvale, Texas, for Celsius creditors. The facility is expected to host approximately 66,000 miners, powered by a robust energy supply exceeding 215 megawatts at full operational capacity.
The partnership with Hut 8 signals a potential avenue for Celsius Network to recover and move forward, emphasizing the resilience of the crypto industry amid challenges.