Distressed crypto lender Celsius Network has announced its plan to unstake its existing Ethereum (ETH) holdings as part of the recalling and rebalancing of its crypto assets to ensure the availability of ample liquidity for creditors’ reimbursement. According to crypto analytics platform Nansen, Celsius Network currently has a total of 206,300 Ether in the staking withdrawal queue.
“Celsius will unstake existing ETH holdings, which have provided valuable staking rewards income to the estate, to offset certain costs incurred throughout the restructuring process,” the embattled cryptocurrency exchange stated on X.
Celsius Creditors to Receive BTC or ETH
The latest news about unstaking Ethereum is also a welcomed idea for these creditors who have waited for more than 18 months to recover their assets. Based on Celsius Network’s plan, creditors are likely to receive either BTC or ETH. The 206,300 ETH is valued at approximately $468.5 million according to the current market price.
Celsius will unstake existing ETH holdings, which have provided valuable staking rewards income to the estate, to offset certain costs incurred throughout the restructuring process
— Celsius (@CelsiusNetwork) January 4, 2024
The Nansen report also shared details about 19,906 validators who were waiting for a full exit. So far, Celsius has withdrawn 40,249 ETH.
Unstaked ETH to Settle Celsius Debt
Per the post, the unstaking event will happen in the next couple of days. The staked ETH is a strategic investment that would serve Celsius Network in the remaining days of its bankruptcy proceedings. Precisely, the Ethereum holding will serve as a source of income to offset piling bills that were accrued from the firm’s restructuring process which has been ongoing for more than one year.
One such accruing debt is its legal fees which was pegged at more than $3 million in October 2022. The most significant percentage ($2.6 million) of this fee was charged by Kirkland & Ellis for its services to Celsius Network between July 13 and July 31, 2022. Akin Gump, another legal advisor, charged over $750,000 for its services from July 13 to August 31, 2022.
Celsius Network Files for Bankruptcy Protection
Recall that Celsius Network filed for bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York in July 2022 alongside other top crypto projects like Three Arrows Capital (3AC), Babel Finance, and Hodlnaut. Their challenges were contributed by the unfortunate crash of TerraUSD and Luna which drained the entire crypto industry of almost $2 trillion.
Amidst its bankruptcy proceedings, the firm has been seeking a favorable settlement for its creditors. This led to a proposal to resolve claims from customers who alleged fraud by increasing recoveries by 5%. In the long run, creditors voted in favor of a proposal that requires Celsius Network’s Debtors to return $2 billion worth of Bitcoin and Ethereum to the exchange’s creditors.