Celsius Moves $529M Worth of wBTC to FTX Exchange: Should We Be Worried?

Troubled lending platform Celsius has moved nearly 25,000 Wrapped Bitcoin (wBTC) worth $528.9 million to cryptocurrency exchange FTX, sparking concern among some in the community about whether Bitcoin will be dumped soon.

Before this huge sum of money was transferred to the exchange, the lending platform paid off the remaining $41.2 million in debt on the Maker (MKR) protocol, releasing the entire wBTC collateral of its loan.

However, the community is unsure what to do with the transaction, with some fearing that the wBTC will soon be dumped on exchanges, driving down the price of Bitcoin.

Others are more hopeful that the move could be Celsius preparing to swap their wBTC for Bitcoin, which could be a good sign for savers who have been hoping to start withdrawing Bitcoin again on the Celsius platform.

Bitcoin is up 8% over the past 24 hours, trading above $22,100, suggesting market participants are taking the news in stride.

The 25,000 wBTC sent to FTX happened earlier today. News broke earlier today that 150,000 bitcoins could be released onto the market as Mt. Gox creditors wait eight years to get their coins back.

Celsius CEO Alex Mashinski has so far been mum on any money flows.

Cryptocurrency attorney Joni Pirovich, head of Blockchain & Digital Assets, told Cointelegraph on July 7 that Celsius’ repayment of Maker’s loan position will ultimately help its clients.

“The Maker protocol relies on overcollateralized loan positions, so the $41M worth of DAI loan repayments freed up funds of 21,962 WBTC, which can now be used to satisfy customer withdrawal requests.”

Even if Celsius eventually files for bankruptcy, repaying loan positions and drawing down collateral could improve the situation for customers, Pirovich added.

“The question is what Celsius will do with the repossessed collateral? Keep it for customers, or risk trading and on-lending.”