Before halting all withdrawals this week, crypto lending platform Celsius is alleged to have quickly transferred over US$320 million worth of cryptos to Bahamian exchange FTX. Rumours are now running rampant that Celsius may be heading to zero.
Celsius token (CEL) fell nearly 70 percent since the firm announced on June 13 it was pausing all withdrawals to “stabilise liquidity”. It now finds itself in troubled waters as the company is rumoured to have unstaked US$247 million in Wrapped Bitcoin from AAVE and sent it to FTX.
Transactions commenced over the weekend, with the first batch of 3,500 Wrapped BTC and 50,000 ETH, and continued to increase in subsequent hours. Celsius has yet to comment on the transfers, with the only communication coming from an announcement halting all users’ services, including withdrawals.
Twitter Accusations of Mismanagement
While the firm has not yet addressed the transfers to FTX, the crypto community is up in arms on Twitter and speculation runs wild that there are associated issues of liquidity.
Users have also criticised the platform for how they believe the project has mismanaged its funds following the collapse of the Anchor Protocol on the now-renamed Terra Classic blockchain. Celsius has been surrounded by scandal since its chief financial officer was arrested in December 2021 on charges of money laundering.
Some believe that if Celsius were to fail, it would precipitate a sell-off of its significant stack of staked ETH, which could cause it to depeg further from ETH.
While it is still unclear what the team at Celsius plans to do with the crypto it has moved, there is a real possibility that it could sell the assets it sent to FTX. Another option might be that it intends to stake the tokens it is sending to the exchange to earn yields. At this early stage, there appear to be more questions than answers. Hopefully some clarity will emerge shortly, particularly for those users who funds remained locked up.
Disclaimer: The content and views expressed in the articles are those of the original authors own and are not necessarily the views of Crypto News. We do actively check all our content for accuracy to help protect our readers. This article content and links to external third-parties is included for information and entertainment purposes. It is not financial advice. Please do your own research before participating.