Celsius to free up $470m worth of ETH to repay creditors by unstaking

Cryptocurrency lender Celsius Network has announced plans to unstake its Ethereum holdings in order to distribute funds to its creditors. The company, which filed for Chapter 11 bankruptcy in July 2022, aims to secure enough liquidity for the distribution by releasing its current Ether holdings. Celsius customers have been waiting for the return of their funds for over a year and a half, and the decision to unstake Ethereum is seen as a positive development. Nansen, a blockchain analytics firm, reported that Celsius currently holds about 32% of the Ethereum pending in the withdrawal queue, amounting to 206,300 ETH valued at around $468.5 million. While some worry that the large-scale withdrawal could negatively impact Ethereum’s market value, others believe it could have a positive influence on the cryptocurrency’s long-term prospects. Celsius’s journey into bankruptcy began after a liquidity crisis sparked by the crypto market downturn, leading to frozen withdrawals and the subsequent Chapter 11 filing. The company has been working on a settlement plan that allows qualified users to withdraw 72.5% of their crypto holdings until February 28. Celsius founder Alex Mashinsky, who was arrested on fraud charges, has been released on bail and is set to go on trial in September. Last month, Judge Martin Glenn authorized Celsius to pursue an alternative plan to form a new public company focused on Bitcoin mining. Creditors will be compensated in part through shares in this new venture, called MiningCo, which will be managed by Hut 8. The deal includes managing five Texas-based mining facilities with a combined computational power of approximately 12 EH/s and a total energy output exceeding 300 MW. MiningCo will focus on staking and mining activities and is expected to generate annual profits between $10 and $20 million from staking cryptocurrencies on the Ethereum network.