Celsius took action to address its financial situation by starting to sell its cryptocurrency assets. With the approval of a US judge overseeing the bankruptcy case, the company converted these currencies into Bitcoin (BTC) and Ethereum (ETH).
During this challenging period, Celsius refrained from making any on-chain moves regarding its assets. However, that changed last Wednesday when I decided to withdraw over $60 million in tokens from cold storage using Fireblocks services.
These assets were later transferred to FalconX, an intermediary platform that facilitated their transfer to the well-known cryptocurrency exchange, Binance.
Source: Blockworks
Starting this morning, Celsius has been actively transferring crypto funds to institutional exchange FalconX. Blockworks reported The cumulative value of these transfers amounted to $63.3 million.
Percentage liquidation and potential impact on cryptocurrency prices
Analysts have raised concerns that Celsius’s ongoing liquidation could hurt cryptocurrency prices, especially for assets included in the fire sale.
Among Celsius’s altcoin holdings, Chainlink (LINK) is believed to be facing the highest selling pressure compared to other assets offloading. However, at the time of this writing, LINK is currently trading at $7.14 USD Koenjikoshowing an increase of 6.6% over the past 24 hours.
Interestingly, other currencies in Celsius’ remaining cryptocurrency portfolio saw positive price movements. Coins such as COMP, SUSHI, and 1INCH saw gains.
However, not all assets traded as well, with BNT, KNC, AAVE, SNX and MATIC all trading in the red, reflecting a decline in their respective prices.
In July 2022, the company found itself in a difficult financial situation, which led the company to seek bankruptcy protection. The decision was made in response to a shortage of customer funds, which has temporarily suspended withdrawals for some time. This development dealt a major blow to Celsius and its operations.
Adding to the already complicated circumstances, the US Department of Justice recently made headlines with the arrest of Alex Machinsky, the former CEO of Celsius.
As of today, cryptocurrencies have a total market cap of $1.16 trillion. Chart: TradingView.com
Bloomberg disclosed last week Mashinsky is facing multiple charges, including securities fraud, commodity fraud, and wire fraud. The arrest of the former CEO exacerbates the challenges the company faces as legal proceedings and investigations begin.
The combination of the bankruptcy filing and Mashinsky’s arrest cast uncertainty over Celsius and its future. These events have undoubtedly created a complex and complicated situation for the company.
The implications of these developments remain for Celsius stakeholders and the broader cryptocurrency community.
Featured image via Coinmama