- Celsius today repaid $10 million to Compound Finance, possibly attempting a move toward solvency.
- Celsius disabled withdrawals, transactions and swaps a week ago. It still hasn’t re-enabled those services.
- The price of Celsius’s CEL token is rising – but likely due to a small squeeze rather than an actual recovery.
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Celsius made a significant payment to Compound today as it moved $10 million of DAI to the aftermarket service.
Celsius paid $10 million
Celsius has sent $10 million worth of the DAI stablecoin to Compound Finance, the popular interest-yielding DeFi service.
Etherscan Block Explorer noted that the firm paid 10 million DAI, collecting 166 comp ($5,200). Celsius has also made several other payments over the past week. In a series of transactions, it paid $53.6 million of DAI to its vault with Oasis Protocol, another yielding DeFi platform.
Celsius uses various DeFi protocols to generate interest for its customers. The prospect of its latest $10 million payment means it is closing positions with those services to gain liquidity and reopen withdrawals for its clients. While this is likely a step toward solvency, today’s $10 million payout is only a small fraction of Celsius’s activity.
For example, the week of May 6, the company saw $397 million in inflows and $1 billion in outflows. As such, if demand remains too high, the firm may be unable to afford withdrawals.
Celsius Updated on Sunday
It’s been a week since Celsius suspended services. The firm disabled withdrawals, transactions and swaps on June 13. In fact, today’s transaction comes shortly after Celsius posted an update confirming that the suspension will continue.
“Our objective is to continue to stabilize our liquidity and operations,” the firm wrote on June 19. It said it would “take time” and that it would “continue to operate round the clock.”
Celsius also said it would cooperate with regulators and authorities. Last week, regulators in four US states launched an investigation into the situation.
Celsius said it would pause the Twitter space and AMA to prioritize resolution of the current situation.
CEL prices rising
Celsius’ decision to suspend transactions caused an uproar in the crypto market as bitcoin prices fell dramatically. BTC price started at $28,000 on June 12, but fell below $18,000 during the week. The value of BTC is $. Is20,500 at the time of writing.
Investors seem to be becoming increasingly dissatisfied with Celsius’ action. Social media users are trying to organize a short squeeze To artificially inflate prices and profit from the resulting brief gains.
Indeed, the value of Celsius’ native token has increased since the company announced the fund freeze. The price of CEL fell from $0.44 on June 12 to $0.15. Now its value is $0.94.
This recovery seems to have been largely due to the short squeeze attempt. However, if Celsius manages to reopen services, it could help the asset regain legitimate value.
Disclosure: At the time of writing, the author of this article owns BTC, ETH and other cryptocurrencies.