In a bold move, Celsius, a beleaguered lending platform, shifted a staggering 428,000 staked ether (stETH), a type of cryptocurrency, amounting to over $780 million this Monday. This shift might signal Celsius’s attempt to recover inaccessible funds in the midst of their ongoing bankruptcy drama.
Celsius’s big play coincided with Lido Finance, the provider of stETH, rolling out a new withdrawal feature. This new feature seems to be a ray of hope for Celsius, potentially assisting them to unlock their previously inaccessible ether. Although Celsius hasn’t withdrawn all their stETH, a test withdrawal of 0.1 stETH was executed soon after the new feature went live.
Lido Finance’s latest upgrade allows stETH holders to withdraw an equivalent amount of ether at a 1:1 ratio. Since its launch yesterday, holders of stETH have been rushing to submit their withdrawal requests, taking advantage of this new opportunity.
In the past, Celsius’s strategy revolved around staking ether on its platform with Lido Finance, which in turn provided stETH. This stETH was then used as collateral in DeFi platforms, such as Aave, to generate yield. But when Celsius hit financial turbulence in 2022, leading to bankruptcy, they faced a liquidity crisis that made it tough to convert stETH back to ether.
But the tide seems to be turning. With Lido Finance’s new withdrawal feature, Celsius might finally have the chance to reclaim their ether, and potentially use it for restructuring efforts.
Celsius, having filed for Chapter 11 bankruptcy protection in July 2022, is now working on a court-approved restructuring plan. This plan could see 85% of customers recoup around 72.5% of their initial deposits. This recent move might help Celsius fulfill their commitment to customers and inch closer to a much-needed recovery.