Embattled lending platform Celsius has transferred nearly 25,000 Wrapped Bitcoin (wBTC), worth $528.9 million, to crypto exchange FTX, prompting concerns from some locally about whether a dump may soon follow.
The large transfer towards the exchange uses the lending platform compensated off its remaining $41.two million of debt to Maker protocol, creating more its loan’s entire wBTC collateral.
However, the city is unsure things to model of the transfer, with a few fearing that the dump from the wBTC around the exchange could soon follow, pushing Bitcoin (BTC) prices lower.
Others happen to be more hopeful the move might be when preparing for Celsius to swap their Wrapped Bitcoin for BTC, which can be a great sign for depositors who’ve been wishing for Bitcoin withdrawals to eventually reopen around the Celsius platform. Bitcoin expires 8% previously 24 hrs to trade above $22,100, suggesting market participants take this news within their stride.
The 21,962 WBTC unlocked from having to pay from the remaining DAI loan has come to FTX…
that did not take lengthy…
Incoming $BTC dump? https://t.co/A9B9YaLQ1W#CelShortSqueeze = #CelPumpAndDump
Not your keys, not your crypto pic.twitter.com/V2edblhmXZ
— Airdawg (@Colwellinvestor) This summer 7, 2022
The 25,000 wBTC delivered to FTX follows this news earlier today that 150,000 BTC might be potentially released in to the market as Mt. Gox creditors obtain BTC back after an eight-year wait.
To date, both Celsius and Chief executive officer Alex Mashinsky have continued to be radio silent about any movement of funds.
Crypto lawyer Joni Pirovich, principal of blockchain and digital assets, told Cointelegraph on Thursday that Celsius’ repayment of their loan position with Maker may ultimately assist its customers.
Related: Bombshell allegations of fraud as KeyFi takes Celsius to the court
“Maker protocol depends on overcollateralized loan positions, therefore the loan repayment of $41 million price of DAI released 21,962 wBTC of capital that is available these days to satisfy customer withdrawal demands.”
Pirovich added that even when Celsius winds up declaring personal bankruptcy, repaying the borrowed funds position and withdrawing collateral could enhance the position of consumers:
“The real question is what’s going to Celsius use the withdrawn collateral? Ensure that it stays in reserve for purchasers or risk it to trade as well as on-lend.”
