- Celsius was ordered to return crypto worth $50M to custodians
- Unstaking should offset restructuring expenses
- Celsius sent Fireblocks more than 30,000 Ether this week
Bankrupt crypto lender Celsius, which is restructuring to become a Bitcoin miner as part of the respective insolvency proceedings, announced plans to unstake its Ether holdings, CoinDesk reported.
Celsius filed for bankruptcy in July 2022 in a series of similar filings by crypto lenders. Soon thereafter, a US bankruptcy judge ordered the lender to return crypto worth $50 million to custody account holders.
The essence and consequences of unstaking
Unstaking involves withdrawing or unlocking previously staked tokens from a blockchain network. Many proof-of-stake (PoS) and delegated proof-of-stake (DPoS) blockchain systems use staking.
When you stake your tokens, you are essentially locking them up in a smart contract or a designated wallet to support the operations of the network. In return for staking, participants often receive rewards, such as additional tokens or transaction fees. The unstaking process usually comes with a waiting period, during which the tokens are held in a locked state before becoming available.
Celsius is selling staking rewards on the open market to cover its reorganization expenses. The company posted on X:
Celsius will unstake existing ETH holdings, which have provided valuable income to the estate, to offset certain costs incurred throughout the restructuring process. The significant unstaking activity in the next few days will unlock ETH to ensure timely distributions to creditors.
Celsius wallets staked Ether worth $151M+
According to Arkham data, crypto wallets linked to the defunct lender have staked Ether worth more than $151 million. CoinDesk presumes the platform earns over 4%-5% in annualized yields on this position. The medium adds that the staking rewards may have encouraged negative attitudes toward Ethereum.
Fireblocks got 30K+ Ether from Celsius
According to data of crypto custodian Fireblocks, Celsius sent it more than 30,000 Ether in the past week. Some of the assets were sent to Coinbase accounts, where they could have been exchanged for stablecoins.
