Dump Incoming? Celsius Pays Back Maker Loan, Moves $440M in Wrapped Bitcoin to FTX


The temperature seems to have changed for struggling crypto lender Celsius.

After keeping client withdrawals, transfers, and swaps frozen for nearly a month—a move Celsius said it took to “stabilize liquidity” in the face of “extreme market conditions”—the company has now fully paid off its $440 million loan.

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Early on Thursday morning, all in one transaction, Celsius used DAI stablecoins to repay the remaining $41 million balance on its Maker Vault, where borrowers lock up collateral and can generate DAI stablecoins equal to half the value of their collateral on the Maker DeFi protocol. Celsius has been close to having its collateral liquidated three times in May and June, when the value of its collateral came close to falling below the critical 150% mark, but has since been making steady payments.

After it repaid the remainder this morning, it then withdrew the $440 million worth of Wrapped Bitcoin (WBTC), a tokenized version of Bitcoin that can be used on the Ethereum network, it had deposited as collateral.

A few hours later, users on Crypto Twitter and the r/cryptocurrency community on Reddit noted that Celsius had moved the recently reclaimed collateral to a wallet on crypto exchange FTX. The company now has $531 million worth of WBTC sitting on the exchange. 

On its face, repaying the loan seems like good news for the beleaguered lender. But now there’s half a billion WBTC sitting on an exchange that will likely be sold in order to help Celsius meet its client obligations. Selling such a large amount could create some serious turbulence in markets, although at the time of writing Bitcoin, and WBTC with it, are up by more than 6% over the last 24 hours.

The loan originated on October 7, 2021, when Celsius deposited 999 WBTC ($53 million at the time) in the vault. By January 24, Celsius had a total of 20,219 WBTC (worth about $733 million at the time) locked in the vault. 

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At its peak, in December, Celsius owed $472 million on its Maker loan.

From February to May, Celsius started to pay back its loan and withdraw portions of its collateral in blocks of 1,000 or 2,500 WBTC. But on May 12, when Terra halted its blockchain for the first time, Celsius added about $65 million worth of WBTC to keep its loan out of liquidation.

Then on June 12, the same day that Celsius announced that it would be freezing withdrawals, the company added another $192 million worth of WBTC. At the time, WBTC was trading at $26,754.94, according to CoinMarketCap.

Since mid-June, Celsius has been steadily making payments on its loan leading up to today’s payoff.

For its part, Celsius has been quiet on its Twitter account and blog for the past week. In its last announcement, on June 30, the company said that it was still working to stabilize liquidity.

“We continue to take important steps to preserve and protect assets and explore options available to us,” Celsius wrote in the blog post. “These options include pursuing strategic transactions as well as a restructuring of our liabilities, among other avenues.”

Celsius did not immediately respond to a request for comment from Decrypt.

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