Celsius recovers over $400 million in Ethereum collateral staked from Aave loan

Struggling crypto lending platform Celsius has nearly wiped out all of its outstanding DeFi debt after recovering 400,000 collateralized Ethereum (stETH) from its loan on Aave.

The Withdrawal stands at $415 million in crypto that has been spared liquidation risk, almost a tenth of the $4.4 billion market capitalization of the asset.

As revealed via wallet tracker Nansen, the company redeemed $81.6 million in USDC stablecoin from Circle to Aave on Tuesday. This reduced his debt to the protocol from $90 million to just $8.5 million.

The scavenged asset, stETH (“staked ETH”) is a crypto derivative token stored with Swimming pool. While not technically “pegged,” its value tends to closely track that of ETH, which was trading at around $1,044 at the time of writing.

The recovered funds join over 23,000 WBTC (worth approximately $440 million) recovered from Celsius’ former Maker Loan, which was fully refunded Last week.

Celsius quickly pivoted to repay its Aave and Compound debt starting Monday, contributing $95 million in stablecoins to loans on both protocols, according to Etherscan. Data.

The latest move brings the embattled lending platform’s total debt on DeFi protocols down to just $59 million at the time of this writing. Crypto data tracker zapper shows that Celsius, in addition to the $8.5 million still owed on Aave, has some $50.3 million in DAI stablecoins on Compound. By repaying this debt, Celsius could recover an additional $227 million, further bolstering its liquidity.

It has now been a month since Celsius became one of the first platforms in the industry to freeze user withdrawals, soon joined by many companies including CoinFLEX and Babel Finance in response to bear market liquidity concerns.

While recent developments may look positive for Celsius and its customers, some details about its financial situation remain unclear. For example, the company did not specify where it sources crypto to pay off its debts, leaving only its imprint on chain to guide viewers.

And one report in late June suggests that FTX CEO Sam Bankman-Fried walked away from providing aid to Celsius after determining its balance sheet was beyond savings.

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