Celsius Sends $320M in Crypto to FTX, Suspends User Withdrawals

Cryptocurrency staking and lending platform Celsius may be dealing with its rumored liquidity crisis, withdrawing $247 million worth of WBTC from Aave and sending it to the FTX exchange.

Speculation is now heating up in the crypto community as the project moved large amounts of WBTC, ETH, and other crypto assets in addition to suspending user withdrawals.

Celsius users have criticized the platform, which they believe mismanaged their funds following the collapse of the Anchor Protocol on the Terra Classic blockchain. The project may be addressing these concerns with recent moves to stabilize liquidity.

Some believe that if Celsius fails, it will sell a large amount of stETH, which will cause it to further decouple from Ethereum. stETH is a token provided by the Lido DeFi lending platform as proof that users pledge ETH. It is currently trading around 4.4% lower than ETH.

Around 18:00 EST on June 12, Celsius’s main DeFi wallet began to see unusual token movements, when Celsius began removing WBTC used to earn interest on deposits from the Aave staking and lending platform.

So far, 9,500 WBTC tokens worth approximately $247 million have been redeemed from Aave. After a series of transactions, all these tokens were sent to the FTX exchange for unknown reasons.

In addition to WBTC, it appears that 54,749 ETH worth approximately $74.5 million was sent to FTX.

While such activity portends very little transparency from Celsius until it explains the moves, the company may be attempting to ensure the stability of its liquidity by replacing many of the volatile funds it has withdrawn from Aave with stablecoins such as WBTC and ETH.

Celsius has staked 204 million USDC stablecoins on Aave since June 12. It also deposited 10 million USDC and about 8.2 million DAI stablecoins on Compound, another DeFi staking and lending platform.

A total of 222 million stablecoins were re-staked by Celsius, almost equal to the value of the WBTC tokens it exited, but still not close to the combined value of WBTC and ETH.

The Celsius team is currently unclear on its plans for the transferred cryptocurrencies. It does have the possibility of selling assets sent to FTX, but another possible option is that it intends to stake the tokens it sends to the exchange in order to earn a yield.

As of this writing, Celsius has sent FTX 9,500 WBTC, 54,749 ETH, 375,343 FTT worth $10 million, 2,455 MATIC ($1,158), 260,000 UNI ($1 million), 2 million Pax Dollars (USDP), and 30 million TrueUSD (TUSD) stablecoins. However, by 23:00 ET, the token movement was still happening.

For now, Celsius users may be biting their nails anxiously, with the platform temporarily suspending withdrawals so that “Celsius can better meet its withdrawal obligations over time,” according to a June 13 announcement from the project.

"Our focus is single: to protect and preserve assets in order to meet our obligations to our clients."

Cointelegraph reported in May that Celsius CEO Alex Mashinsky blamed Wall Street opportunists for the problems the platform is facing, including bankruptcy rumors.

Cryptocurrency investors are largely unimpressed by the new wave of FUD from Celsius. Over the past 24 hours, the total market capitalization of cryptocurrencies has dropped by 7.6% to $1.07 trillion. Celsius’ own token, CEL, has fallen more than 60% to $0.15 in the past 12 hours. All prices listed in this article are from price tracker CoinGecko.