Celsius Network’s Ethereum Unstaking: Creditor Repayment Plan

Celsius Network, the cryptocurrency lending platform now out of operation, has announced to its 243,000 social media followers that it will unstake its Ethereum holdings. This move is part of the asset preparation process to ensure timely distributions to creditors. In a recent post, the company stated, “The significant unstaking activity in the next few days will unlock ETH to ensure timely distributions to creditors.”

This decision comes as a strategic measure after the platform’s restructuring. Celsius had used Ethereum staking as a means to assist in its restructuring process. In a series of posts on X (formerly known as Twitter), the company expressed its intention to unstake all Ethereum holdings. The rewards from these staked assets, amounting to $227.03 million, have been instrumental in covering legal fees during their bankruptcy process.

However, the crypto community’s response to this development has been mixed. A user, known as APE on X (formerly Twitter), referred to this move as “an awful lot of bags to nuke,” and shared a screenshot showing the substantial ETH holdings in the Celsius wallet.

The spotlight on Celsius Network intensified since July 2022. BeInCrypto reported on September 6 that a judge ordered the freezing of several bank accounts and a residential property belonging to Alex Mashinsky, the former CEO of Celsius. This asset freeze is part of the ongoing legal proceedings against Mashinsky, who faces criminal charges for allegedly defrauding Celsius investors. Despite his arrest in July on various charges, including securities fraud, Mashinsky maintains his innocence.

The asset freeze prevents Mashinsky from accessing his savings and real estate, impacting his ability to finance his legal defense. He was released on a $40 million bond following his July 13 arrest and pleaded not guilty to charges of multibillion-dollar fraud and market manipulation schemes the next day.

Prosecutors accuse Mashinsky of misrepresenting Celsius as a safe crypto deposit bank that offered interest earnings. In contrast, they allege that he was operating a risky investment fund and was dishonest about its financial health.

Celsius Network’s move to unstake its Ethereum holdings marks a significant step in addressing the financial obligations to its creditors. As the cryptocurrency world watches closely, this action illustrates the ongoing complexities and challenges in the world of digital finance, especially in the wake of company bankruptcies and legal controversies.