Celsius Network Pays Off Maker Loan, Freeing Up $440M of Collateral

The troubled crypto lender paid down the remaining $41 million of its debt on the DeFi platform.

AccessTimeIconJul 7, 2022 at 1:30 p.m. UTC
Updated May 11, 2023 at 3:57 p.m. UTC

Celsius Network, the crypto lender that halted user withdrawals last month because of liquidity pressures, reclaimed $440 million of collateral on Thursday after it fully paid off a loan on Maker, one of the largest decentralized finance (DeFi) platforms in the crypto universe.

On-chain data shows that a wallet linked to Celsius repaid the remaining $41.2 million of the loan in DAI, the Maker protocol's stablecoin. That prompted the Maker protocol to release 21,962 wrapped bitcoins (WBTC), a bitcoin equivalent token of the Ethereum blockchain, which was pledged as collateral of the loan. That works out to about $448 million, since WBTC was recently trading at about $20,400.

The move means a big liquidity boost for the beleaguered crypto lender's finances. Celsius halted all customer withdrawals and transactions on June 12 to avoid a run on deposits.

"The debt repayment to Maker is a key milestone for Celsius that should give users and other stakeholders some hope that the company can continue to work through its loan book," Alex Tapscott, managing director of investment firm Ninepoint Partners' digital asset division.

Fundstrat analyst Walter Teng told CoinDesk earlier this week that the collateral that Celsius freed up "can be sold on centralized exchanges or via over-the-counter to meet creditor demands and customer withdrawals."

Celsius closed its loan on the Maker protocol by paying back the remaining $41.2 million in DAI, freeing up the loan's WBTC collateral. (DeFi Explore)
Celsius closed its loan on the Maker protocol by paying back the remaining $41.2 million in DAI, freeing up the loan's WBTC collateral. (DeFi Explore)

Representatives of Celsius didn't return emails requesting comment on paying off the loan and further plans of debt restructuring.

CEL, the native token of the Celsius platform, spiked 10% after the repayment data became public, but it is still down 81% since the start of the year.


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Krisztian  Sandor

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.