Celsius Reclaims $172M Collateral From Aave, Compound

The liquidity-strapped crypto lender has paid down $95 million in debt from the two DeFi platforms since Friday.

AccessTimeIconJul 11, 2022 at 5:57 p.m. UTC
Updated May 11, 2023 at 5:10 p.m. UTC

Celsius Network, the troubled crypto lender that has halted customer withdrawals because of liquidity troubles, paid down $95 million of its debt to the Aave and Compound decentralized finance (DeFi) platforms.

The maneuver freed up $172 million of collateral that had been locked in the platforms as collateral. Celsius used a similar treasury-management tactic last week on the Maker platform to free up $480 million in collateral.

  • Data on Nansen Portfolio tracker shows that a wallet linked to Celsius transferred $35 million in DAI – MakerDAO's dollar-pegged stablecoin – and $40 million in Circle's USDC stablecoin in various transactions. The wallet also paid down another $20 million in USDC late Sunday to the Aave protocol, according to data on the blockchain transaction tracer Etherscan.
  • Celsius also exchanged some interest-bearing token derivatives on Aave for 1,647 WBTC ($33.4 million worth) and about $1.6 million combined of BAT and xSUSHI, a derivative of decentralized exchange SushiSwap's native token that pays interest on the exchange's staking platform.
  • The down payments let Celsius redeem a part of the collateral of the debt. Since Friday, the firm reclaimed 8,436 wrapped bitcoin (WBTC), which is worth $172 million at current prices. It also redeemed about $700,000 in COMP, the Compound protocol's native token.
  • The recent credit crisis in the crypto markets hit centralized crypto lenders hard, with Voyager Digital filing for bankruptcy protection and BlockFi seeking a credit lifeline and bailout from crypto exchange FTX. Celsius halted all customer withdrawals starting June 12 to avoid a run on its deposits, while cutting jobs and hiring restructuring experts.
  • Celsius, however, now appears on its way to pay off the rest of its debt to DeFi protocols to reclaim the digital assets pledged against the loans as collateral.
  • After the moves, the firm still owed $140 million to Aave and Compound, reduced from $235 million as of last Friday, according to DeFi data platform Zapper's dashboard.
  • The collateral that Celsius locked up against those loans stood at $680 million, shrinking from $950 million, and should be freed up theoretically if Celsius fully pays off rest of the debt.
Celsius still owed $90 million and $50 million in stablecoins to DeFI protocols Aave and Compound as of Monday. (Nansen)
Celsius still owed $90 million and $50 million in stablecoins to DeFI protocols Aave and Compound as of Monday. (Nansen)


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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.