Celsius Withdraws ETH Positions From Bancor, Here's Why
Crypto lender Celsius paused withdrawals, swaps, and transfers between accounts earlier this week due to liquidity risks. According to blockchain security PeckShield, Celsius has started withdrawing its Ethereum (ETH) positions in the DeFi protocol Bancor after the firm disabled the Impermanent Loss Protection to protect liquidity providers.
Celsius Clears its Ethereum (ETH) Positions in Bancor
PeckShieldAlert in a tweet on June 23 reported that the suspected Celsius-related address has withdrawn about 2000 ETH liquidity from a Bancor liquidity pool and received about 1150 ETH.
As the DeFi liquidity crisis still persists on the platform, Celsius has become the first to withdraw ETH holdings after the Impermanent Loss Protection was disabled.
On June 20, Bancor announced disabling the Impermanent Loss Protection due to extreme market conditions and market manipulation. However, exposure to Celsius and the selloff of BNT tokens rewards have caused the costs to rise further.
Celsius Network is under pressure because of liquidation risks. The firm had also liquidated its positions earlier to manage liquidity and loans. Moreover, the community-led recovery plan through short squeeze was executed on June 21. Short-sellers of the Celsius’ CEL token covered their positions by pushing up the price through mass purchases and withdrawing them from various exchanges.
Meanwhile, crypto market leader FTX has committed to bailout several crypto firms currently facing liquidity risks to exposure to Three Arrows Capital and Celsius. Alameda Research, owned by FTX, has transferred billions to bailout Voyager Digital and BlockFi.
However, another crypto market leader, Binance has refused to bailout crypto firms. Binance said:
“Don’t perpetuate bad companies. Let them fail. Let other better projects take their place, and they will.”
DeFi Firms’ Tokens Continues to Slide Amid Crisis
Celsius’ CEL token has fallen nearly 80% in two months, with the current price trading at $0.9113. In the last 24 hours, the CEL token is down 14%.
Bancor’s BNT token has dived 75% in the last 2 months. At the time of writing, the BNT token price is trading at $0.5039.
Other DeFi tokens have also fallen significantly in this DeFi crisis.
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