Celsius Sends $500M of Bitcoin Derivative to Crypto Exchange After Debt Payoff

The move comes just after the crypto lender reclaimed $450 million of collateral in WBTC, closing its loan from DeFi lending protocol Maker, blockchain data shows.

AccessTimeIconJul 7, 2022 at 8:58 p.m. UTC
Updated May 11, 2023 at 5:10 p.m. UTC

Beleaguered crypto lender Celsius deposited $500 million in wrapped bitcoin (WBTC), a bitcoin derivative product of the Ethereum blockchain, to crypto exchange FTX just hours after Celsius repaid its debt to the decentralized lending protocol Maker and reclaimed $450 million of collateral in WBTC.

Blockchain transaction data shared by blockchain data firm Nansen shows that a wallet linked to Celsius sent 24,463 WBTC to the FTX in various steps.

Earlier Thursday, CoinDesk reported Celsius reclaimed 21,963 wrapped bitcoin (WBTC) tokens after it fully paid off its debt to Maker. Celsius already redeemed a 2,000 WBTC installment of the collateral on Tuesday.

Fundstrat analyst Walter Teng said that Celsius's "de-leveraging activity on-chain will add sell-side pressure to assets that have been used as collateral," including WBTC, which has been the firm's largest holding pledged against its decentralized finance (DeFi) loans.

The move suggests that Celsius might sell the assets for more liquid assets, although market data on the exchange did not indicate that it had already happened. At press time, WBTC traded closely in tandem with bitcoin, changing hands at $21,600, up 6% in the last 24 hours.

Volume and price action did not indicate that Celsius started to sell its WBTC holding yet. (FTX)
Volume and price action did not indicate that Celsius started to sell its WBTC holding yet. (FTX)

Celsius halted withdrawals and all user transfers starting in June, citing "extreme market conditions" that led to fears that the lender might face insolvency. The firm also hired restructuring advisers, while regulators also started investigations into the crypto lender's operation in several U.S. states.

Last week, the company said in a statement that it was exploring options to "preserve and protect assets" in consultation with experts, which can include “pursuing strategic transactions” and “restructuring its liabilities,” as reported.


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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.

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