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Following debt pay off, Celsius sends $500 million in Bitcoin derivatives to a crypto exchange

Just hours after paying off its debt to the decentralized lending protocol Maker and recovering $450 million in collateral in wrapped bitcoin (WBTC), the troubled crypto lender Celsius deposited $500 million in WBTC to the crypto exchange FTX. WBTC is a bitcoin derivative product of the Ethereum blockchain.

According to blockchain transaction data provided by blockchain data company Nansen, a wallet connected to Celsius sent 24,463 WBTC to the FTX over the course of several transactions.

Thursday morning, CoinDesk reported that Celsius had recovered 21,963 wrapped bitcoin (WBTC) tokens after fully paying Maker's debt. On Tuesday, Celsius already redeemed a 2,000 WBTC portion of the collateral.

The deleveraging activity on-chain by Celsius, according to Fundstrat analyst Walter Teng, "de-leveraging activity on-chain will add sell-side pressure to assets that have been used as collateral," including WBTC, which has been the company's largest holding pledged against its decentralized finance (DeFi) loans.

Despite the fact that market data on the exchange did not show that it had already occurred, the move raises the possibility that Celsius will exchange the assets for more liquid ones. At the time of publication, WBTC was closely correlated with bitcoin, changing hands at $21,600, up 6% over the previous 24 hours.

Beginning in June, Celsius stopped all user transfers and withdrawals, citing "extreme market conditions" that raised concerns about the lender's potential insolvency. The company also hired restructuring consultants, and regulators in several US states began looking into the activities of the crypto lender.

Following expert advice, the company stated in a statement last week that it was looking into options to "preserve and protect assets," which may include "pursuing strategic transactions" and "restructuring its liabilities," as was previously reported.


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