Celsius Stakes $75 Million in Ether With Figment Amid Bankruptcy

Amidst bankruptcy proceedings, beleaguered crypto lender Celsius Network has staked approximately $75 million worth of Ethereum (ETH) through institutional-grade staking service Figment. The transfer of 40,928 ETH occurred via fourteen transactions between May 10th and 12th, indicating a significant movement of funds for Celsius since its Chapter 11 filing in July. Figment operates as a non-custodial service, ensuring that Celsius retains control over its deposited assets. The staking move allows Celsius to generate rewards on its ETH holdings while undergoing restructuring efforts, offering an average annualized reward of 5.6% according to Figment's website.

Embattled Cryptocurrency Lender Celsius Stakes $75 Million in Ether Through Figment

Blockchain data reveals that beleaguered cryptocurrency lender Celsius Network has staked approximately $75 million worth of ether (ETH) via Figment, a renowned institutional-grade staking service.

According to data compiled by crypto intelligence firm Arkham Intelligence, Celsius initiated fourteen transactions between May 10 and May 12, transferring a total of 40,928 ETH to an aggregation smart contract designated as "Figment ETH2 Beacon Depositor 1" on the blockchain explorer Etherscan. The assets were subsequently forwarded to Ethereum's proof-of-stake Beacon chain's deposit contract.

Figment operates as a non-custodial service, implying that Celsius retains control over the keys to its deposited digital assets, as confirmed by a company representative via email.

This significant movement of funds marks one of Celsius' most substantial financial maneuvers since filing for Chapter 11 bankruptcy protection in July 2022. Celsius, like other crypto firms, succumbed to insolvency following the precipitous collapse of the Terra blockchain project and the ensuing crypto market downturn a year prior. This forced the company to suspend user withdrawals.

As part of its restructuring efforts, the bankruptcy court is overseeing an auction process to sell the firm and its assets to potential investors, including digital asset investment firm NovaWulf and private equity behemoth Apollo Global Management.

Staking assets with a dedicated service enables Celsius to generate rewards on its digital asset holdings during its ongoing restructuring. Figment's website indicates that Ethereum staking offers an average annualized staking reward of 5.6%.

Celsius' decision to stake with Figment came as a surprise to industry observers, given that the company also maintains one of the largest ETH staking pools, with approximately $290 million in assets under management.

"The intriguing aspect is that they opted to stake with Figment rather than through their staking pool," noted Tom Wan, an analyst at digital asset investment product firm 21Shares.

Arkham's blockchain data indicates that the last deposit into Celsius' own staking pool occurred in April 2022, well before the withdrawal freeze and bankruptcy filing. Additionally, Celsius holds approximately $750 million worth of Lido Finance's liquid staking derivative token, stETH, which also generates rewards.

Updates:

1. Additional details have been incorporated as of 12:33 UTC, May 15, 2023.
2. Figment's comment has been added, and the second paragraph has been revised to clarify that Figment is a non-custodial service as of 21:20 UTC, May 15, 2023.