Embattled lending platform Celsius has transferred nearly 25,000 Wrapped Bitcoin (wBTC) worth $528.9 million to crypto exchange FTX, prompting concerns from some in the community that a dump could soon follow.
The massive transfer to the exchange comes after the lending platform paid off its remaining $41.2 million in debt to the Maker Protocol (MKR), releasing all collateral on its wBTC loan.
However, the public is unsure what to make of the transfer, with some fearing that a wBTC dump could soon follow, pushing bitcoin prices down.
Others were more hopeful that the move could be in preparation for Celsius to exchange their packaged bitcoins for BTC, which could be a good sign for depositors who are hoping that bitcoin withdrawals will eventually reopen on the Celsius platform. Bitcoin is up 8% in the past 24 hours to trade above $22,100, suggesting market participants are taking the news in stride.
The 21,962 WBTC unlocked from paying off the remaining DAI loan have already found their way to FTX…
it didn’t take long…
Incoming $BTC dump? = #CelPumpAndDump
Not your keys, not your crypto pic.twitter.com/V2edblhmXZ
— Airdawg (@Colwellinvestor) July 7, 2022
The 25,000 wBTC sent to FTX follows news earlier today that 150,000 BTC could potentially be put on the market as Mt.Gox creditors get their BTC back after an eight-year wait.
So far, both Celsius and CEO Alex Mashinsky have been radio silent about any movement of funds.
Crypto attorney Johnny Pirovich, director of Blockchain & Digital Assets, told Cointelegraph on July 7 that Celsius’ repayment of the Maker loan will ultimately help his clients.
Related: Bombshell fraud allegations as KeyFi takes Celsius to court
“The Maker Protocol relies on over-collateralized credit positions, so paying off the $41 million DAI loan freed up 21,962 WBTC of capital, which is now available to meet customer withdrawal requests.”
Pirovic added that even if Celsius files for bankruptcy, paying off the loan position and withdrawing the collateral could improve the position of customers.
“The question is, what will Celsius do with the withdrawn collateral? Hold it in reserve for customers or risk trading and lending it out.”
Add Comment