Home - News - Bankrupt Celsius Network Channels $75 Million-What’s going on?

James Carter

May 19, 2023

Bankrupt Celsius Network Channels $75 Million-What’s going on?

According to data that was found on the blockchain, the defunct cryptocurrency lending platform Celsius Network used the staking service Figment to stake about $75 million worth of ETH.

One of the key features of Celsius Network is its interest-earning accounts. Users can deposit their cryptocurrencies into these accounts and earn interest on their holdings, typically at higher rates compared to traditional banks. The interest rates vary depending on the cryptocurrency and market conditions.

Celsius Network also provides borrowers with access to loans by using their cryptocurrency holdings as collateral. This allows users to leverage their crypto assets without having to sell them.

An Overview of Celsius Network and Its Features

To further incentivize users, Celsius Network has its native utility token called CEL. Holding CEL tokens can provide additional benefits, such as higher interest rates on deposits and lower interest rates on loans.

The platform has gained popularity among cryptocurrency enthusiasts and investors looking for ways to earn passive income on their digital assets. However, as with any financial service involving cryptocurrencies, it’s important for users to be aware of the risks associated with lending and borrowing in the volatile crypto market.

The enormous transfer of funds from Celsius to Figment took place over the course of fourteen different transactions that took place between May 10 and 12, and the combined total was around 40,928 ETH, which is equivalent to approximately $74.5 million using the exchange rate from Tuesday.

Bankrupt Celsius Network

The monies were sent to a smart contract referred to as “Figment: Eth2 Depositor 1” by the blockchain explorer Etherscan.

Also Read:  Bitcoin Hits $23.9K as Amazon Enters Web3 in Asia

According to the data provided by Etherscan, the identical money was afterward transferred to Ethereum’s Beacon Deposit Contract in order to be staked on Ethereum’s newly implemented proof-of-stake blockchain.

Celsius Corporation filed for Chapter 11 bankruptcy in July of last year. This transaction is one of the largest that has been made at that time.

Celsius Network collapsed

Celsius or any of the parties engaged in the firm’s bankruptcy procedures have not made any statement about the reason why the transfer was made. However, one idea suggests that Celsius is merely attempting to earn a yield on some of the assets it possesses while the processes are still in progress.

According to data provided by 21Shares and Dune Analytics, Celsius already has more than 158,000 ETH staked on Ethereum through its own staking pool. At the moment’s current exchange rate, this equates to almost $287 million.

Therefore, a question that has not yet been answered is why Celsius decided to send so much ETH to Figment rather than staking it in its own pool. This is a subject matter that has not yet been answered.

What’s going on Celsius Network?

According to Stakingrewards.com, the average annual yield on staking through Figment is currently at 5.6%. Ethereum network itself can now pay out up to 9% to individuals that stake on their own.

During the summer of 2022, Celsius Network was brought down by a market-wide price decline that affected the majority of major cryptocurrencies.

It is thought that the inability of Celsius to withdraw ETH that it had staked and locked via staking providers. Lido Finance was a significant contributor to the collapse of Celsius. This is because Celsius’s own depositors hurried to remove their cash from Celsius.