Drawing back the curtains on the world of cryptocurrency reveals another dramatic unfolding as Celsius Network, a crypto-lending firm fallen on hard times, takes its first plunge into liquidation by converting its altcoin holdings into Bitcoin (BTC) and Ether (ETH). Notably, this comes a week after an order granted by a New York court on June 30, which gave the go-ahead for Celsius debtors to trade their altcoins for BTC and ETH.
As per details from the on-chain analysis provider LookOnChain aggregated by Arkham Intelligence, Celsius has busied itself in transferring altcoins and stablecoins to various wallets. These include wallets related to crypto market maker Wintermute, along with crypto custodial firm Fireblocks and stablecoin issuer Paxos. A staggering sum of $70 million in altcoins, such as Chainlink (LINK), Polygon (MATIC), as well as stablecoins like Binance USD (BUSD) and USD Coin (USDC), has reportedly been moved.
However, this move has aroused a simmering apprehension amongst investors and traders. Many are worried that the migration of these altcoins to new addresses may be a harbinger of an impending grand sell-off of the transferred tokens. If such conjecture proves accurate, it may well trigger sizable market volatility due to potential negative price impacts from a sudden, mass sell-off.
Viewed against the backdrop of Celsius Network’s filing for Chapter 11 bankruptcy following Terra’s collapse on July 13, these concerns seem more poignant—especially considering the crypto-lending firm reported assets and liabilities ranging from $1 billion to $10 billion at the time, with upwards of 100,000 creditors.
In parallel, the crypto consortium Fahrenheit announced plans to acquire Celsius with the aim of recalibrating the bankruptcy plan on May 25. The consortium managed to successfully procure the loan firm’s institutional loan portfolio, staked cryptocurrencies, and mining unit.
Meanwhile, the SEC’s persistent crackdown resulted in more than 160 cryptos, including Solana (SOL) and Cardano (ADA), being classified as securities. This has prompted many crypto exchanges into converting their crypto holdings into unregistered security offerings—an additional subplot to Celsius’s story that mirrors the broader sector’s navigate around regulatory scrutiny.
Therefore, the events surrounding Celsius can read both as an isolated economic narrative as well as a synecdoche for the wider evolving crypto landscape—showing just how intertwined individual companies’ fortunes can become within the dynamic intricacies of cryptocurrency and blockchain technology.
Source: Cryptonews
