The bankrupt cryptocurrency lender Celsius Network announced its plan to unstake significant holdings of ethereum to facilitate asset distribution to its creditors. This move is part of the firm’s ongoing efforts to restructure and resolve outstanding liabilities.
Crypto Lender Celsius to Unstake Ether
Celsius Network’s decision to unstake ethereum (ETH) reflects a broader strategy to manage its assets amidst a challenging phase. After filing for Chapter 11 bankruptcy protection in July 2022, the company faced a liquidity crisis following the downward spiral of the crypto market. The unstaking process is intended to provide necessary liquidity to offset costs incurred during the restructuring process and ensure timely distributions to creditors.
“Celsius will unstake existing ETH holdings, which have provided valuable staking rewards income to the estate, to offset certain costs incurred throughout the restructuring process,” the company announced on Friday. The company added:
The significant unstaking activity in the next few days will unlock ETH to ensure timely distributions to creditors.
According to the blockchain and crypto intelligence firm Nansen’s staking data, Celsius has a notable 206,300 ETH queued for unstaking withdrawal. This significant withdrawal is anticipated to considerably influence the firm’s asset handling and represents a move towards meeting its commitments to creditors.
Following the decision to open its vault, allowing select users to withdraw a portion of their crypto assets until February 28, as authorized by the court’s settlement agreement, this maneuver is part of a broader restructuring strategy.
This approach encompasses not only asset redistribution but also a shift towards alternative commercial paths. In November 2023, Celsius revealed a post-bankruptcy focus on bitcoin mining, indicating a shift in its business operations. This strategic pivot received the green light from U.S. District Judge Martin Glenn of Manhattan at the close of December 2023.
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