Celsius Recovered $400M In Staked ETH Collateral From Aave

Celsius recovered $400 million in staked ETH collateral from Aave and the move brings the lending platform’s total debt to $59 million. However, the company already filed for bankruptcy earlier today so let’s read more in today’s cryptocurrency news.

The struggling crypto lending platform Celsius cleared all of the DeFi debt after recovering 400,000 collateralized staked Ethereum from the loan on Aave. The withdrawals amounted to $415 million in crypto that was saved from liquidation which is a tenth of the asset’s $4.4 billion market cap. Accoridng to the Nansen Portfolio tracker, the company repaid $81.6 million in the Circle USDC stablecoin and reduced the debt to the protocol from $90 million to over $8.5 million.

The recovered asset staked ETH is a crypto derivative token that is stored with Lido but not pegged so its value is closely tracked to the one of ETH and was trading for $1.044. the reclaimed funds join over 23,000 WBTC recovered from Celsius’ former maker loan that was repaid in full last week. Celsius pivoted to paying down the Compound and Aave debt and contributed a combined $95 million in stablecoins to the loans on both protocols as per the data on Etherscan. The latest move brings the lending platform’s debt on Defi protocols down to over $59 million at the time of writing.

The data tracked by Zapper shows that Celsius in addition to the $8.5 million owed on Aave, has $50.3 million in DAI stablecoins on Compound and by paying off the debt, Celsius can recover another $227 million. It’s been a month since Celsius became one of the first platforms to freeze user withdrawals after plenty of companies like CoinFLEX and Babel Finance responded to bear market liquidity issues.

The recent developments could seem positive for Celsius and the customers with details about the financial position remaining hazy. For exampel, the company hasn’t clarified where it will source the crypto to pay down its debts and leaves only the on-chain footprinting to guide the onlookers. The reports show that FTX CEO Sam Bankman Fried passed up providing aid to Celsius after determining that its balance sheet was beyond saving.

As earlier reported, Celsius said that the filing will provide the opportunity to stabilize the business and consummate the restructuring that will maximize the value of the stakeholders. As per the release, Celsius and other subsidiaries filed voluntary petitions for the reorganization under chapter 11 in the US Bankruptcy Court for the Southern District of New york.