Celsius Network has moved over $300 million worth of cryptocurrency from Aave to FTX and halted user withdrawals.
Rumors about the Celsius Network liquidity crisis could be more true than expected. All alarms have gone off when the lending and staking platform has withdrawn $243 million in Wrapped Bitcoin and sent it to the FTX exchange.
The unusual token movements began at around 18:00 on June 12 from Celsius’ main DeFi wallet when it began withdrawing WBTC from the staking and lending platform Aave, which Celsius uses to earn profits on its deposits.
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As of the time of writing this article, they have been exchanged 9.500 WBTC tokens worth 247 million dollars and 54.749 ETH, priced at $74,5 million, from Aave. Following a series of transactions, these tokens have been sent to the FTX exchange.
The community is on alert about Celsius's liquidity, as the platform has been moving large amounts of WBTC, ETH and other cryptocurrencies, and most importantly: it has Paused withdrawals for users.
Experts have pointed out that Celsius Network's lack of liquidity could be linked to the fall of Terra and LUNASpecifically, many users have pointed out that those responsible for the project would have mismanaged the funds after the collapse of Anchor protocolCelsius may now be dealing with the consequences of investing its cash in Anchor.
Some users point out that if Celsius fails, it will have to sell their significant stETH stake, which would lead to further unpegging of ETH. stETH is a wrapped token provided by the Lido DeFi lending platform that is awarded as proof that a user has staked ETH. Currently, stETH is unpegging from ETH and is trading 4,4% below Ethereum.
What do these moves mean for Celsius Network?
Until it explains the reasons for the transfers and the halting of user transfers, these moves are detrimental to Celsius as they are not very transparent. It could be that it is trying to secure their liquidity by replacing tokens with stablecoins.
In this regard, since June 12, the platform has staked $204 million in USDC on Aave and deposited $10 million USDC and another 8,2 million DAI in Compound.
The value of the stablecoins staked by Celsius is almost the same as the WBTC tokens it withdrew from the platform, although it still does not come close to the total value of the movements made these days.
Whatever the case, Celsius's plans for the cryptocurrencies sent to FTX remain unclear. While they could continue staking the tokens on the exchange, they could also sell them to regain some liquidity.
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