Celsius Network, a cryptocurrency lending company that filed for bankruptcy in 2022, announced that it will unlock $466 million of ether (ETH) holdings from Ethereum staking. This action is due to the need to “offset certain costs incurred during the restructuring process” under the reorganization process that follows Chapter 11 of the US Bankruptcy Law.
In the same thread, the company comments that the payment will be made “in kind”, using bitcoin (BTC) and ether (ETH) to satisfy the debts, which does not imply any conversion between assets. Therefore, it would be a mere distribution and not a sale.
According to the Nansen Query portal , a platform that collects data ‘on-chain’, up to 32% of all ethers of entities that are in the withdrawal queue ( queue ) of the Ethereum network belong to Celsius, as can be seen.
Only one entity surpasses it: Figment, the Canadian cryptocurrency services and solutions firm. Also according to historical data from Nansen, Celsius has withdrawn a total of 13,657 ETH from the Ethereum network in staking rewards alone, as can be seen in the following chart.
Celsius: bankrupt, but with profits
Arkham Intelligence , a data explorer of tokens and financial entities, shows that Celsius Network currently has a portfolio valued at $796,743,055, a figure that shows that the company, although bankrupt , has not yet liquidated a large part of its capital. .
As much as 98% of Celsius Network’s portfolio is distributed between the Bitcoin and Ethereum networks, mostly in holdings of both networks’ primary currencies: BTC and ETH. Only 1% is distributed in the Avalanche network, and less than 1% in second layers and side chains like Arbitrum and Polygon.
As demonstrated by the following profit and loss graph, the firm’s portfolio has seen practically stabilized profits from the beginning of 2023 until today.
In November 2023, Crypto News reported Celsius was authorized by the US bankruptcy court to become a creditor-owned mining company . The same court ruled that, in addition to the participation fee in the company, these creditors should receive compensation in cryptocurrencies.
The latest movements in Celsius’s portfolio and the withdrawal of its participation in the Ethereum staking mechanism could, in fact, be due to actions aimed at executing part of the cryptocurrency compensation alluded to by the court.
Meanwhile, data indicates that staking to become an Ethereum validator appears to be stalling: at the time of writing, more than 15,000 validators are queued to exit the network’s staking while none are entering. As the graph of active validators demonstrates, the growth curve has flattened, and the number of stakers is growing much slower than before.