On-chain Analytics Detects Massive Transfers from Defunct DeFi Protocol

Lookonchain, an on-chain analytics blockchain platform, has detected a Celsius wallet sending transfers to cryptocurrency exchanges.

Celsius Wallet transfers $36 million to Coinbase and FalconX platforms. What’s happening?

By Jimmy Aki

On-chain analytics blockchain platform Lookonchain has discovered a series of significant transactions from a wallet associated with the defunct crypto lending protocol, Celsius Network. The wallet made deposits totaling 15,200 Ether tokens, equivalent to approximately $35.47 million, to the Coinbase and FalconX exchanges within a 10-hour timeframe. This sudden surge in activity highlights the ongoing presence and activity of the decentralized finance (DeFi) lending network, even in its state of bankruptcy.

More Cryptocurrency at Play

According to Lookonchain’s findings, two other Celsius-staking crypto wallets currently hold a staggering total of 557,081 Ether tokens, valued at $1.3 billion. Prior to the recent deposits, the Celsius Wallet had transferred a substantial amount of 18,000 Ether tokens, worth $40 million, to the Coinbase exchange just 12 hours earlier. Since initiating payouts on November 13, 2023, Celsius has deposited a remarkable 280,670 Ether tokens, totaling $621 million, across Coinbase, OKX, and FalconX centralized trading platforms.

Payout Strategy for Bankruptcy Compensation

The deposits made by Celsius Network are part of a larger payout strategy to compensate affected investors following the protocol’s bankruptcy filing. In early January, Celsius announced that it would be unstaking its Ether token holdings to facilitate the timely distribution of digital assets to creditors. This move also helps offset some of the costs incurred during the platform’s restructuring process.

• North Korean Hackers Steal Less Crypto, But Still Pose a Threat in 2023
• 🚀 The Future of Crypto Investments: Blur (BLUR), Ethereum Classic (ETC), and Rebel Satoshi (RBLZ) 🌙
• Bitbot: Revolutionizing Telegram Trading Bots for Mass Adoption

Explaining the rationale behind this decision, the blockchain protocol highlighted the significant returns generated by its staked ETH assets, making the recall process more manageable.

Challenges Faced by Celsius Network

Despite its significant role in promoting DeFi and crypto lending services in 2021 and 2022, Celsius Network has faced significant challenges that ultimately led to its forced bankruptcy. The value of its ERC-20 CEL tokens suffered a drastic 99% dip due to the platform’s inability to fulfill customer withdrawal orders. Additionally, Celsius Network’s founder and CEO, Alex Mashinsky, is currently facing charges for multiple counts of fraud and selling unregistered securities brought by the US Securities and Exchange Commission (SEC). In fact, court filings reveal that the SEC has taken legal action against both the blockchain protocol and its founder for allegedly manipulating the market of the CEL token.

BTC Mining Company Setup to Aid in Bankruptcy Process

While Celsius Network strives to reimburse its investors, it continues to face challenges. To facilitate the ongoing restructuring, a court ruling has authorized the establishment of a Bitcoin mining facility named NewCo. With a capitalization of $225 million, this BTC mining company aims to contribute to the revenue necessary for the bankruptcy compensation process. Recent financial figures disclosed by the mining company indicate a 19% yield increase compared to its optimal overclock specifications for its hardware. Interestingly, the company’s Bitcoin holdings have witnessed an impressive 89% surge, although its cash balance has experienced a reduction.

🔍 More Information and Insights:

Q: Why is it important to track transactions from defunct crypto protocols like Celsius Network?

A: Tracking transactions from defunct crypto protocols is crucial for several reasons. Firstly, it allows us to monitor any suspicious or unauthorized activity associated with these wallets, ensuring the security and integrity of the blockchain ecosystem. Secondly, it provides valuable insights into the ongoing involvement of these protocols, even in their state of bankruptcy, highlighting any potential attempts to manipulate markets or evade regulatory scrutiny.

Q: What impact can the ongoing bankruptcy proceedings of Celsius Network have on the broader DeFi industry?

A: The bankruptcy proceedings of Celsius Network can have a significant impact on the DeFi industry. The platform’s downfall and subsequent legal actions by regulators serve as a cautionary tale for other DeFi protocols. It highlights the importance of maintaining transparency, adhering to regulatory guidelines, and implementing robust security measures to protect user funds. The industry will likely experience increased scrutiny and regulation as a result of such cases.

Q: What is the significance of the BTC mining company, NewCo, in the bankruptcy process of Celsius Network?

A: The establishment of the BTC mining company, NewCo, plays a vital role in the bankruptcy process of Celsius Network. By capitalizing the mining company with $225 million, it aims to generate revenue that can be used to reimburse affected investors. This initiative demonstrates the innovative use of blockchain technology and cryptocurrency mining as a means to address financial challenges and provide a path to recovery.

📚 References:

1. Lookonchain Twitter
2. Celsius Network Twitter
3. Celsius CEO Facing Charges
4. Establishing BTC Mining Facility
5. ERC-20 Tokens
6. Decentralized Finance (DeFi)
7. Crypto Analysts Bullish on AI Cryptocurrency
8. Bitcoin Mining Stocks

❓ What are your thoughts on the ongoing activity from the defunct Celsius Network? Share your insights and join the discussion! Don’t forget to like and share this article for more engaging content. 🚀

We will continue to update Blocking; if you have any questions or suggestions, please contact us!