Celsius Network to Unstake Ethereum Holdings for Creditor Asset Distribution

In according to reports, Celsius Network, the bankrupt crypto lender, has unveiled plans to unstake its current Ethereum holdings.

The announcement, conveyed through a tweet, revealed Celsius Network’s initiation of the recall and rebalancing process for its assets. This strategic step aims to streamline the asset distribution process, citing the need to offset incurred costs during the ongoing restructuring.

Despite acknowledging the significant staking rewards generated from its ETH holdings, the firm expressed its intent to unstake these assets to bolster liquidity, crucial for the impending creditor repayments.

Recent data from Nansen indicates that Celsius accounts for a substantial 32% of the total ETH awaiting withdrawal, tallying up to approximately 206,300 ETH—a value exceeding $466 million based on prevailing market prices.

The financial predicament for Celsius Network emerged when it filed for Chapter 11 bankruptcy protection back in July 2022, coinciding with the crypto market downturn following Terra’s collapse.

Following legal proceedings, a repayment strategy was greenlit by a judge in November 2023, promising a return of 67% to 85% of the creditors’ investments. This plan involves the allocation of around $2 billion in Bitcoin and Ethereum to the creditors, signifying a step towards addressing the aftermath of the bankruptcy.

Celsius Network’s decision to unstake its ETH holdings serves as a strategic move to navigate the complex landscape of creditor repayments, emphasizing the company’s commitment to fulfilling its obligations amidst the challenging financial scenario.

Image credits: Reuters

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