Celsius Moved $529 Million From wBTC to FTX Exchange: Should We Be Worried?

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Beleaguered lending platform Celsius has transferred nearly 25,000 Wrapped Bitcoin (wBTC), worth $528.9 million, to crypto exchange FTX, raising concerns among some community members that whether a dump may soon follow.

The huge move to the exchange comes after the lending platform repaid its remaining $41.2 million of Maker Protocol (MKR) debt, releasing the full wBTC collateral from its loan.

However, the community is unsure what to make of the transfer, with some fearing that a dump of wBTC on the exchange will soon follow, driving down Bitcoin prices.

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Others are more hopeful that the move could be in preparation for Celsius to exchange their packaged Bitcoin for BTC, which may be a good sign for depositors who were hoping that Bitcoin withdrawals would eventually reopen on the Celsius platform. Bitcoin is up 8% in the past 24 hours to trade above $22,100, suggesting market participants are taking the news at their own pace.

The 25,000 wBTC sent to FTX follows news earlier today that 150,000 BTC could potentially hit the market as Mt.Gox creditors get their BTC back after an eight-year wait.

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So far, Celsius and CEO Alex Mashinsky have remained silent on any fundraising.

Crypto attorney Joni Pirovich, director of Blockchain & Digital Assets, told TAUT on July 7 that Celsius’ repayment of its loan position with Maker will ultimately help its clients.

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“The Maker Protocol relies on over-collateralized loan positions, so the repayment of DAI’s US$41 million loan freed up 21,962 WBTC of capital which is now available to meet customer withdrawal requests.”

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Pirovich added that even if Celsius ends up filing for bankruptcy, repaying the loan position and removing the collateral could improve clients’ position.

“The question is what will Celsius do with the warranty removed? Keep it in reserve for customers or risk it to trade and lend.