Crypto loan platform Celsius has clarified its intentions as it continues to repay its Aave loan. The outstanding debt has now fallen to almost $50 million. Celsius also pulled a large amount of altcoins from Aave.
Celsius pulled a large amount of altcoins from Aave
Crypto lender Celsius has now reduced its outstanding debt to almost $50 million. Celsius also withdrew $416 million worth of stETH from Aave. Celsius likely wants to repay the Compound loan and additional token liquidations it has yet to pay off this week. Transaction log from Zapper:
cryptocoin.com As we reported, the loan repayment rate increased tremendously after Celsius hired new law firm Kirkland & Ellis LLP as part of its restructuring plan. However, the possibility of filing for bankruptcy is still on the table.
Celsius, Aave and Compound continue to pay off
Celsius withdrew 63.50 million USDC from FTX to repay the $71 million Aave loan. The outstanding Aave loan is $8.42 million worth of USDC and $80,000 worth of REN. Celsius is able to fully pay off its Aave debt today.
Alongside Aave, Celsius has a massive $50 million Compound debt in DAI. Additionally, an outstanding $3.20 million fUSDC loan from Notal Finance will be repaid by September 25. Interestingly, Celsius withdrew its 400,000 Staked Ethereum (stETH) collateral worth $416 million after repaying its USDC debt on its Aave wallet address. However, the lack of stETH liquidity prevents Celsius from draining all stETH. Celsius’s Aave currently has $10.92 million in stETH left.
DeFi analyst DeFiyst doubts that stETH could make its way into the Curve pool, tweeting:
My instincts say it all depends on the preparation of the C11 Bankruptcy documents. If they can present a reasonable case to the judge for them to hold a PIK of exposure to STETH, because they believe this will give creditors a higher value, they may wait. Otherwise they will sell it over the counter.
Do refunds mean withdrawals or bankruptcy for the altcoin project?
Celsius paid over $220 million in one week, closing the outstanding Maker loan on July 7. After that, the crypto lending platform sent almost $500 million worth of wBTC to FTX.
Now Celsius is actively repaying outstanding Aave and Compound loans. Thus, Aave credit went down to almost zero. In addition, the firm removed the stETH collateral and moved it to a different wallet. According to the terms and conditions, customers will lose all their funds if Celsius goes bankrupt.
Celsius’s only option may be to resume withdrawals. However, proceeding with withdrawals will give customers the opportunity to withdraw all their funds. Therefore, a limited withdrawal option helps to lower the rising FUD.
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