Celsius repaid its MakerDAO loan and withdrew 23 962 WBTC in collateral

The crypto-lending platform Celsius Network has fully repaid its loan in the MakerDAO DeFi protocol and withdrew collateral totaling 23 962 WBTC worth about $490 million.

An analyst using the pseudonym DeFiyst initially suggested Celsius would liquidate assets through an over-the-counter deal arranged in advance.

Meanwhile, he noted that funds were sent to the company’s main wallet, which contains sizable debt positions in Compound (about $100 million) and Aave (about $178 million).

As promised, updating on any sizable moves:

All DAI debt paid down in @CelsiusNetwork wBTC maker vault and collateral removed ($450m in BTC).

I’d imagine they already have an OTC deal setup. Doubt this hit the spot markets but we shall see. https://t.co/nqZynVWiAI pic.twitter.com/qmk3WuWiEu

— DeFiyst (@DeFiyst) July 7, 2022

«Fund consolidation ahead of bankruptcy?», wondered the expert.

Further actions by Celsius showed that the firm is likely to move cryptocurrency to the spot market, pressuring Bitcoin’s price. DeFiyst noted that the crypto lender began moving funds to pre-exchange wallets and sent a test transaction of 0.01 BTC to FTX.

0.01 BTC in (test amount). Fair to assume the $0.5bn in BTC is all going to FTX now. pic.twitter.com/o1PBDTa4Hl

— DeFiyst (@DeFiyst) July 7, 2022

Zaheer Ebtiqar, an analyst at Deribit Insights, emphasized that over the past three weeks Celsius has been aggressively reducing its debt positions. He said the company’s actions have inadvertently signalled to the market how people view its solvency and deleveraging.

From the rumors of FTX walking away from a deal with Celsius we can infer that the firm had a much worse financial situation than any other loan book.

In that time, the firm has tapped restructuring pros and has indicated all the signs of bankruptcy on the horizon.

— Zaheer (@SplitCapital) July 7, 2022

On June 13, Celsius suspended withdrawals, swaps and transfers between accounts due to extreme market conditions.

Analysts suggested that the real reason behind the events was a ‘liquidity crisis’.

Commenting on the company’s further actions, Georgetown University law professor Adam Levitin noted that its leadership had bet on a ‘resurrection gamble’.

He said that the firm’s bankruptcy was virtually inevitable.

As reported, the financial conglomerate Goldman Sachs intends to raise $2 bn from investors to buy Celsius assets, according to the media.

Also, the financially distressed rival platform BlockFi entered into a deal with FTX.

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