blockworks.co
Crypto investors holding bags of polygon (MATIC), chainlink (LINK) and aave (AAVE) look out: Celsius’ estate is apparently liquidating $160 million in crypto ahead of user payouts.
Celsius was first given the nod to start selling crypto for bitcoin (BTC) and ether (ETH) starting July 1.
The firm however hadn’t made any on-chain moves until last Wednesday, when it pulled more than $60 million in tokens from cold storage with Fireblocks.
Native cryptocurrencies for DeFi aggregator 1inch (1INCH) and decentralized exchange SushiSwap (SUSHI) were part of the haul, among about a dozen others.
As of this morning, Celsius has been sending crypto to FalconX, an institutional exchange. At time of publication (2:00 pm ET), those funds have amounted to $63.3 million — mostly LINK and AAVE with smaller amounts of tokens such as binance coin (BNB) and synthetix (SNX).
No bitcoin or ether have flown back into Celsius wallets as yet, so it’s still unclear whether the estate is actively selling what it deposits on FalconX.
Some analysts have suggested that Celsius’ liquidations could drag down crypto prices, especially those included in the fire sale.
AAVE, SNX, bancor (BNT), LINK, kyber network (KNC) and MATIC have all dropped between 7.4% and 3.7% since Friday night. BTC has only slipped 0.45%.
But other tokens included in Celsius’ remaining crypto portfolio have fared much better. 1INCH, SUSHI and compound (COMP) have jumped between 11.3% and 31.5%.
Celsius has stablecoins to be “sold” for bitcoin and ether
With such mixed results, it’s probably too early to tell whether Celsius is directly impacting markets. Its portfolio set for liquidation may also be small potatoes compared to the total trading volume of even some of the smaller assets.
Celsius may opt to sell its cryptocurrency through over-the-counter (OTC) channels rather than spot markets. This approach would not impact prices.
There’s also millions of dollars in stablecoins to be “sold” for bitcoin and ether (actually buys, which would be somewhat positive for prices).
Holders should still brace. Celsius may not have enough to crash prices, but crypto markets are notorious for overreacting. Both scenarios share the same outcome: volatility.
Celsius filed for bankruptcy last July, having collapsed under contagion resulting from the Terra and Three Arrows Capital implosions.
Founder and CEO Alex Mashinsky was arrested last week, charged with market manipulation alongside securities, commodities and wire fraud, among others.
All while Celsius earns additional miner extractable value (MEV) from its staked ETH, now $10 million in 10 months and counting.
Celsius is said to owe $4.7 billion to creditors. A recent settlement with the Federal Trade Commission demands an equivalent amount on behalf of users.