Home » Celsius Network Launches $25 Million Crypto Wallet For Custody Account Holders

Celsius Network Launches $25 Million Crypto Wallet For Custody Account Holders

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According to a report by blockchain intelligence firm Arkham Intelligence, crypto lender Celsius Network, which is now operating under bankruptcy protection, has built a crypto wallet containing $25 million worth of digital assets for Celsius’ custodial account holders to withdraw.

The transferred assets included $10.39 million worth of USDC stablecoin, $8.8 million worth of ether (ETH), $4.31 million worth of altcoins, and $1.57 million worth of other stablecoins, including Binance USD, DAI, Paxos dollar, and Gemini USD.

Celsius’ interim chief executive officer, Chris Ferraro, stated in a Wednesday morning court hearing that custody account holders had withdrawn $17.7 million and another $3.5 million worth of these cryptocurrencies. He says this constitutes 60% of qualified custody users and 80% by crypto value.

Celsius was among several prominent cryptocurrency companies that failed last year due to market turbulence. The lender suspended user withdrawals in June, and in July, it filed for Chapter 11 bankruptcy protection. In a subsequent court proceeding, the ownership of the assets deposited by customers was the subject of intense argument.

On March 2, following approval from the U.S. bankruptcy court, Celsius announced that it had granted access to funds for certain custodial account holders with specific limitations. As per a court document, the lender was authorized to release 94% of the custodial assets belonging to each eligible user.

According to blockchain transaction data, Arkham reported withdrawals of $13.62 million from the $25 million. According to a Telegram post from an Arkham analyst, the remaining $4 million in withdrawals were likely made in bitcoin (BTC). Arkham does not track Bitcoin blockchain transaction data.

Celsius Network Bold Move With $500M wBTC Burn

According to the Arkham report, Celsius also burnt approximately $500 million worth of wrapped bitcoin (wBTC) by the end of February. On the Ethereum blockchain, a wBTC token represents one Bitcoin.

The lender transferred over 20,000 wBTC in two different transactions to a separate address, which subsequently forwarded the tokens to the cryptocurrency exchange FalconX. FalconX forwarded the tokens to an apparently Celsius liquidator or partner’s account. The entity subsequently burned or redeemed the tokens for BTC.

The move may be a part of Celsius’ strategy to consolidate its crypto assets and fulfill customer withdrawals in BTC.  In August, reports indicated that the crypto lender was significantly lacking in its BTC holdings. It was disclosed that the company owed over 105,000 BTC to its customers, despite having only 14,578 BTC and 23,348 wBTC recorded on its balance sheet.

Recent data indicates that the Ethereum-based cryptocurrency wallets of Celsius contain more than $1 billion in crypto assets. This excludes holdings on other blockchains, including recently redeemed BTC on the Bitcoin blockchain.

The lender’s largest holdings consist of $638 million of staked ether derivative (stETH) issued by Lido and $251 million of the lender’s own CEL tokens.

Jay Solano

Jay Solano

Jay is a crypto and NFT enthusiast dedicated to exploring the dynamic world of digital assets. As a leading crypto blog writer, he relishes sharing his knowledge on the latest trends, breakthroughs, and investment opportunities in the blockchain world.

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