The lending platform Celsius Network transferred 24,463 WBTC (~$533 million) to the FTX exchange just hours after repaying its debt in the MakerDAO DeFi protocol.
Celsius dunking 24k $WBTC (half a billion dollars worth) onto FTX.
Nothing to see here. pic.twitter.com/phFcDZXZ7H
— Nansen Intern 🧭 (@nansen_intern) July 7, 2022
On July 7, the company closed the vault in MakerDAO and withdrew 23,962 WBTC from the protocol. Experts had expected Celsius to sell the assets via over-the-counter trades, but later noted the platform’s intention to tap the spot market.
Users noted that after the transaction the company owned about 98% of all WBTC on FTX.
I have concerns about the privacy of the FTX gigaentity mixer 🤣 celsius now own 98% of all the wbtc in it pic.twitter.com/tFUXdvPMxQ
— alto | dollar.eth (@etheraltog) July 7, 2022
In a conversation with CoinDesk, Fundstrat analyst Walter Teng explained that Celsius’s on-chain activity related to deleveraging would put downward pressure on the value of the assets the company had used as collateral.
Over the last 24 hours, Bitcoin’s price rose 6.7% and tested above $22,000, signalling relative calm among market participants in the wake of the large transaction. At the time of writing, the asset trades near $21,750.
According to CoinGecko, WBTC remains pegged to Bitcoin. The price divergence between the two assets does not exceed 0.18%.
Meanwhile, Arca’s chief investment officer Jeff Dorman called Celsius’s decision to sell Bitcoin on the spot market odd.
Anyone stop to question why BTC was used as collateral in the first place? BTC, not USD, was deposited into Celsius by their customers & Celsius used it (via wBTC) to earn a yield.
Celsius owes BTC not USD back. Why would they sell BTC if they owe it back to their customers? https://t.co/KzqxIh8Meo
— Jeff Dorman, CFA (@jdorman81) July 7, 2022
«Did anyone stop to ask why BTC was used as collateral in the first place? BTC, not USD, were deposited into Celsius by its customers, and the company used them (via WBTC) to earn a yield. Celsius owes BTC, not USD, back. Why would they sell Bitcoin if they owe it back to their customers?», — wrote him.
On June 13, Celsius paused withdrawals, trading and transfers between accounts ‘due to extreme market conditions’.
Commenting on the company’s next steps, Georgetown University Law Professor Adam Levitin noted that its management had bet on an ‘adventure in revival’. He said the firm’s bankruptcy was virtually inevitable.
Earlier, the former DeFi contractor Celsius — KeyFi Inc. — filed a lawsuit against the lending platform, accusing it of failing to fulfil contractual obligations.
Read ForkLog’s Bitcoin news on our Telegram — cryptocurrency news, prices and analysis.