- Eligible Celsius creditors are expected to start receiving their compensation in the coming days after months of unnecessary pain caused by Alex Mashinsky and his team.
- The withdrawal of over 200k ETH should not have a significant impact on the price action and network security as there are more than 28 million staked by over 900k validators.
Celsius Network, one of the crypto firms that went down during the 2022 winter and filed for Chapter 11 bankruptcy protection in the United States, is in the final stages of its restructuring plan.
The distressed cryptocurrency lending platform has in the recent past been detailing the process to repay the eligible creditors. Already, the United States Securities and Exchange Commission has charged former Celsius CEO Alex Mashinsky for falsely promising a safe investment through unregulated securities. Nonetheless, Mashinsky has been a free man through a $40 million bail with the trial scheduled to happen in September 2024.
The collapse of Celsius sent shockwaves through the entire cryptocurrency industry as the company had lent out over $8 billion and had around 1.7 million customers at the time of its bankruptcy. With a $1.2 billion deficit and $167 million in cash at the time of bankruptcy, Celsius was forced to liquidate some of its assets along the way including GK8 digital asset custody platform.
Celsius Creditors to Receive Payment Soon
After months of waiting, Celsius creditors should start receiving their funds in the coming days after the distressed crypto firm announced on Friday that the unstaking of Ether has been initiated. According to blockchain analytics firm Nansen, almost a third of the ETH in the pending withdrawal queue belongs to Celsius.
Moreover, Celsius expects to receive a total of 206,300 ETH, which is worth approximately $470 million at the current exchange rate. Meanwhile, Celsius announced that eligible creditors will receive in-kind distributions of Bitcoin and Ether in the coming days as outlined in the court process.
Notably, Celsius has accrued a significant amount of Ether through the staking process, which will be used to offset some of the costs incurred during the restructuring process.
Celsius will unstake existing ETH holdings, which have provided valuable staking rewards income to the estate, to offset certain costs incurred throughout the restructuring process
— Celsius (@CelsiusNetwork) January 4, 2024
In the future, Celsius intends to only focus on Bitcoin mining, which is in accordance with the restructuring plan. The company announced last November that the new mining entity dubbed NewCo will be publicly traded and intends to retain some of the assets.
ETH Market Impact and Price Analysis
The Ethereum ecosystem has grown over the years to a mature industry capable of providing liquidity to institutional investors via over-the-counter process (OTC). However, the significant Celsius unstaking of Ether in the coming days will involve an in-kind distribution of assets, thus giving creditors the will to sell at their will through different web3 channels.
As a result, Ether’s selling pressure could significantly increase in the coming weeks amid high-impact news from the spot Bitcoin ETF decision in the United States.
From a technical standpoint, ETH/USD on the daily time frame has been forming a reversal pattern, with a possible triple top and a bearish divergence on the daily Relative Strength Index (RSI). In case of a possible selloff triggered by the Celsius unstaking, ETH/USD could find a solid support range between $1,900 and $2,100. Moreover, ETH has experienced significant resistance around $2,433 and has dropped about 5 percent in the past week to trade at $2250
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