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Friday, December 2, 2022

Celsius moved $529M worth of wBTC to FTX exchange: Should we be worried?

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Embattled lending platform Celsius has transferred practically 25,000 Wrapped Bitcoin (wBTC), worth $528.9 million to crypto alternate FTX, prompting considerations from some in the neighborhood about whether or not a dump could quickly observe. 

The big switch to the alternate comes after the lending platform paid off its remaining $41.2 million of debt to Maker (MKR) protocol, liberating up its mortgage’s complete wBTC collateral.

However, the neighborhood is uncertain what to make of the switch, with some fearing {that a} dump of the wBTC on the alternate may quickly observe, pushing Bitcoin costs down.

Others have been extra hopeful that the transfer could be in preparation for Celsius to swap their wrapped Bitcoin for BTC, which can be a superb signal for depositors who’ve been hoping for Bitcoin withdrawals to ultimately reopen on the Celsius platform. Bitcoin is up 8% previously 24 hours to commerce above $22,100, suggesting market members are taking the information of their stride.

The 25,000 wBTC despatched to FTX follows the information earlier at present that 150,000 BTC could be probably released into the market as Mt.Gox collectors get their BTC again after an eight-year wait.

So far, each Celsius and CEO Alex Mashinsky have remained radio silent about any motion of funds.

Crypto lawyer Joni Pirovich, Principal of Blockchain & Digital Assets advised Cointelegraph on July 7 that Celsius’ compensation of its mortgage place with Maker will finally help its prospects.

Related: Bombshell allegations of fraud as KeyFi takes Celsius to court

“Maker protocol relies on overcollateralized loan positions, so the loan repayment of US$41 million worth of DAI released 21,962 WBTC of capital which is now available to meet customer withdrawal requests.”

Pirovich added that even when Celsius finally ends up submitting for chapter, that repaying the mortgage place and withdrawing collateral may enhance the place of prospects.

“The question is what will Celsius do with the withdrawn collateral? Keep it in reserve for customers or risk it to trade and on-lend.”