Celsius transferred over a quarter billion dollars worth of funds from Aave to FTX for unspecified reasons, in addition to suspending withdrawals for users.
Cryptocurrency staking and lending platform Celsius may have addressed rumors of a liquidity crunch by withdrawing $247 million worth of Wrapped Bitcoin (wBTC) from Aave and listing it on the FTX exchange.
Speculations in the crypto community are currently heating up as the project moves massive amounts of wBTC, Ether (ETH) and other crypto assets and suspends user withdrawals.
Celsius users have criticized the platform for how they believe the project mishandled its funds following the collapse of the anchor protocol on the blockchain now called Terra Classic. The project could address these issues with recent moves to stabilize liquidity.
Some believe that if Celsius fails, it will sell its sizeable ETH stack (stETH) and continue to lag behind ETH. stETH is a token provided by decentralized finance (DeFi) lending platform Lido that serves as proof that a user has staked ETH. It is currently trading around 4.4% lower than ETH.
The unusual movement of tokens began Sunday around 6:00 p.m. EDT from the central Celsius DeFi wallet, when it began removing wBTC from the Aave staking and lending platform, which Celsius used to earn interest on its deposits.
Celsius has withdrawn 50,000 Ether and 7,000 WBTC collateral from its Aave position in 0x8ace’s main DeFi wallet. 6,000 WBTC and 20,000 Ether (for now) sent to #FTX…
After receiving $169 million from FTX… pic.twitter.com/xquMoIcyuZ
– Dirty Bubble Media: ☠️ (@MikeBurgersburg) June 13, 2022
So far, 9,500 wBTC tokens have been redeemed by Aave, worth around $247 million at the time of writing. After a series of transactions, all of these tokens were sent to the FTX exchange for an unknown reason.
In addition to wBTC, 54,749 ETH was sent to FTX, which was worth around $74.5 million at the time of writing.
While such activity does not bode well for Celsius’ transparency until the steps are explained, the company may be looking to ensure its liquidity stability by replacing many of the volatile funds it has withdrawn from Aave, such as WBTC and ETH, with stablecoins .
As of Sunday, Celsius has staked 204 million USD Coin (USDC) stablecoins on Aave. He also invested $10 million plus about 8.2 million Dai (DAI) stablecoins in Compound, another DeFi staking and lending platform.
Celsius’ total 222 million stablecoin restakes almost equal the value of the removed wBTC tokens, but still falls short of the combined value of WBTC and ETH.
The Celsius team’s plans regarding the migrated cryptocurrency are not yet clear. There is a real possibility that he could sell the assets sent to FTX, but another plausible option is that he intends to stake the tokens sent to the exchange to generate revenue.
At the time of writing, Celsius has shipped 9,500 wBTC, 54,749 ETH, and 375,343 FTX (FTT) tokens for a total of $10 million. In addition, the company sent 2455 MATIC ($1,158), 260,000 UNI ($1 million), 2 million Pax Dollar (USDP) and 300,000 TrueUSD (TUSD) stablecoins to FTX. However, at 3:00 UTC, the movement of tokens was still happening.
Currently, Celsius users may be biting their nails with concern because the platform has suspended payouts to “put Celsius in a better position to meet its payout obligations over time,” according to the project’s announcement on Monday:
“We work with a single goal: to protect and preserve assets to meet our obligations to customers.”
In May, Cointelegraph reported that Celsius CEO Alex Mashinsky blamed the platform’s woes, including bankruptcy rumors, on seedy Wall Street opportunists.
Related: Bitcoin price falls to its lowest level since May as the Ethereum market records an 18.4% loss
Crypto investors are largely unfazed by Celsius’ new round of FUD. The total capitalization of the cryptocurrency market has fallen by 7.6% to $1.07 trillion in the last 24 hours. CEL, Celsius’ native token, is down over 60% to $0.15 in the last 12 hours. All prices shown in the article are from CoinGecko’s price tracker.