Author:
The controversial events surrounding Celsius Network continue to unfold as the team unstaked hundreds of millions of dollars in crypto from Aave and transferred them to FTX. So far, the project has not provided a reason why, but social media speculations are running rampant.
- The transactions began during the weekend, with the first batch seeing 3,500 Wrapped BTC (worth $89 million at the time) and 50,000 ETH. The amount continued to increase in the following hours.
- On-chain data shows that Celsius has sent over 100,000 ETH to FTX in the past few days, as well as 9,500 WBTC. However, the staking and lending platform has also transferred other tokens, including FTT, MATIC, UNI, USDP, and TUSD, to the exchange. Overall, the total amount sent now is around $320 million.
- As of writing these lines, Celsius is yet to comment on the transfers. The only communication that came from the team was an official announcement halting all user services, including withdrawals.
- This came after the firm had transferred the aforementioned funds to FTX and just hours following an interesting comment made from Celsius CEO – Alex Mashinsky. Answering a Twitter post about potential issues with his platform, Mashinsky asked:
Mike do you know even one person who has a problem withdrawing from Celsius?,
why spread FUD and misinformation.
If you are paid for this then let everyone know you are picking sides otherwise our job is to fight Tradfi together…
— Alex Mashinsky (@Mashinsky) June 11, 2022
- While Celsius is yet to shed some light on the transfers to FTX, the crypto community speculates on Twitter that they came due to liquidity issues.
- According to one user, the company has faced such problems for the past several months as previous hacks harmed its reserves, and it lost some funds in LUNA and Anchor Protocol.
- The user also estimated that Celsius customers withdraw 50,000 ETH weekly while determining that the platform can continue working properly for approximately five weeks before defaults or bankrupts.
It would be naive to think that this chain reaction of
bear market losses > illiquidity > auditor rage quit > users lose trust > bank run > death spiral
will not happen because its a fat tail event
LUNA/UST has shown us how badly investors gauge fat tail event risks
— otteroooo (@otteroooo) June 8, 2022
PrimeXBT Special Offer: Use this link to register & enter CRYPTOPOTATO50 code to receive up to $7,000 on your deposits.
