Media: Celsius pulled about $500 million from Anchor protocol amid the UST crash

The crypto-lending platform Celsius pulled assets worth approximately $500 million from the Anchor protocol against the backdrop of the collapse of the algorithmic stablecoin UST. The Block reports.

Over the past five months, Celsius-controlled wallets sent no less than 261,000 ETH (~$544 million at the time of writing) to Anchor, according to researchers from the publication’s research team and the analytics firm Hoptrail.

Their analysis and the source’s comments indicate the firm appears to have salvaged the funds.

The crypto-lending platform offers clients an annual percentage yield on their assets of up to 17%. The largest protocol in the Terra ecosystem until recently allowed earning 20% on UST deposits.

From December to March, Celsius transferred 146,000 ETH into Anchor. In April and early May the company added deposits of another 115,000 ETH.

In the morning of May 11, when the stablecoin had begun to fall, the platform withdrew 225,000 ETH from the protocol. The Block Research experts were unable to track the movement of the remaining assets. However, a person familiar with the situation told the publication that there were no Celsius funds left in Anchor.

On the same day the company published a statement on Twitter:

“The implementation and use of robust risk management frameworks to ensure the safety of assets on the platform is part of our obligations to serve the community. All user funds are safe.”

As part of our responsibility to serve our community, @CelsiusNetwork implemented and abides by robust risk management frameworks to ensure the safety and security of assets on our platform.

All user funds are safe. We continue to be open for business as usual.

— Celsius (@CelsiusNetwork) May 11, 2022

“Celsius proved relatively sound, as it used Bonded ETH (bETH) as collateral to borrow UST. In the current situation this proved more reliable than buying the stablecoin on the market,” said The Block analyst Igor Igamberdiev.

He added that the withdrawn funds were sent to the Aave lending protocol in the form of stETH.

As of writing, UST quotes were near $0.10. The price of LUNA, used to maintain the peg at $1 through arbitrage, collapsed to $0.00001 (CoinGecko).

On May 13, restarted the Terra blockchain for the second time in a day. Users gained the ability to withdraw wrapped assets such as bETH to native platforms.