Celsius, a troubled lending platform, has transferred almost 25,000 wrapped Bitcoins (wBTC), valued at $528.9 Million to crypto exchange FTX. This raised concerns among some members of the community that a dump might soon follow.
This huge transfer to the exchange follows the completion of $41.2 million in debt to Maker protocol. The platform also released all its wBTC collateral.
The community is not sure what to think of the transfer. Some fear that wBTC could be withdrawn from the exchange, which would push Bitcoin prices lower.
Others believe the move is in preparation for Celsius’s swap of their wrapped Bitcoin for BTC. This could be good news for depositors who have been waiting for Bitcoin withdrawals on the Celsius platform to reopen. The market participants seem to be taking the news well. Bitcoin has risen 8% over the past 24 hours to trade at $22,100.
21,962 WBTC that was unlocked after paying off the DAI loan is now available to FTX. https://t.co/A9B9YaLQ1W#CelShortSqueeze = #CelPumpAndDump Not your keys, not your crypto pic.twitter.com/V2edblhmXZ
— July 7, 2022, Airdawg (@Colwellinvestor).
The 25,000 wBTC that was sent to FTX today follows news that 150,000 BTC could be released to the market, as Mt.Gox creditors receive their BTC back after an 8-year wait.
Both Celsius and CEO Alex Mashinsky remain radio silent on any funds movement.
Joni Pirovich (Crypto lawyer and Principal at Blockchain & Digital Assets), told Cointelegraph that Celsius’ repayment of its Maker loan will eventually help its customers.
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“Maker protocol is based on overcollateralized loans positions. Therefore, the US$41,000,000 loan repayment to DAI resulted in 21,962 WBTC capital that can now be used to fulfill customer withdrawal requests.
Pirovich stated that even if Celsius files for bankruptcy, repaying the loan and withdrawing collateral can improve the customer’s position.
“The question is, what will Celsius do about the withdrawn collateral?” It can be kept in reserve or traded and on-lended to customers.
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