Bankrupt Lender Celsius Moves $780,000,000 Worth of Crypto After Lido Finance Allows Withdrawals

Bankrupt crypto lending platform Celsius transferred 428,000 staked ether (stETH) worth $780 million on Monday, according to Etherscan data.

The transfer corresponds with the introduction of a withdrawal feature by Lido Finance, the stETH provider, for the first time.

It’s unclear whether the transfer is related to a possible attempt by Celsius to regain previously inaccessible funds during its bankruptcy proceedings.

Celsius went bankrupt in 2022 after being unable to fulfill customer withdrawals, and have been in working through bankruptcy ever since.

Part of the platform’s business model was staking their customers’ ETH with Lido in return for stETH, which could then be used as collateral on other platforms to attempt to generate yield. After suffering financial difficulties, Celsius was unable to convert the stETH back into ETH.

Celsius and its former CEO Alex Mashinsky have been the subject of scrutiny since the firm’s collapse, including from regulators.

New York State Attorney General (NYAG) Letitia James filed a formal complaint against Mashinsky in January, months after Celsius went bankrupt.

James alleges that Mashinsky made misleading statements to investors about the details of his company and failed to properly register Celsius as required by state law.

Says the AG,

“As the former CEO of Celsius, Alex Mashinsky promised to lead investors to financial freedom but led them down a path of financial ruin. The law is clear that making false and unsubstantiated promises and misleading investors is illegal.”

Mashinsky recently responded to the allegations, saying that James’ charges were based on misinformation.

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Featured Image: Shutterstock/Yurchanka Siarhei