Celsius Reduces Aave Debt Significantly, Reclaims $420M in Collateral

  • Blockchain data shows that Celsius has repaid $81.6 million of its debt to Aave today alone, freeing up 400,000 stETH tokens that it used as collateral.
  • Data from crypto tracking platform Zapper also shows the company’s outstanding debt has been reduced to $59 million, the majority of which is owed to Compound.
In spotlight, Alex Mashinsky, founder and CEO of Celsius

Alex Mashinsky, founder and CEO of Celsius, speaking at CoinDesk’s Consensus conference in September, 2019. CoinDesk

Crypto lender Celsius has significantly reduced its outstanding debts to decentralized finance (DeFi) protocol Aave since the start of the week, freeing up almost $420 million in collateral.

As previously reported, Celsius began repaying its debt to Aave at the start of the week, when the troubled crypto lender transferred $20 million USDC tokens to the DeFi protocol. Since then, the company has almost entirely paid off its debt to Aave, having transferred $81.6 million USDC tokens today alone, according to data from Etherscan.

The move has allowed Celsius to reclaim 400,000 stETH tokens (worth around $418 million at current prices) that it used as collateral for its loan from Aave. The stETH token is a derivative version of ETH, with each token representing 1 ETH that is locked up on Ethereum’s upcoming proof-of-stake network.

Last week, the company also repaid its $228 million debt to DeFi lending platform Maker, reclaiming around $440 million of collateral in the form of Wrapped Bitcoin (wBTC). According to data from crypto tracking platform Zapper, Celsius has reduced its overall debt to $59 million, and currently owes Aave $8.5 million in USDC and $75,000 in REN tokens, and around $50 million DAI tokens to Compound. Once it has repaid its debt to Compound, Celsius will be able to free up another $227 million in tokens used as collateral.

Celsius is one of the crypto lenders that decided to suspend withdrawals when the crypto market turned sour in order to prevent a run on its deposits. While other companies have filed for bankruptcy, it appears that Celsius it trying to avoid that fate. Back in June, “people with knowledge of the situation” said Celsius’ lawyers were advocating for a Chapter 11 bankruptcy, but executives at the company were against that idea.

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August 1, 2022, 10:54 AM
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Celsius Follows Voyager, Files for Chapter 11 Bankruptcy
  • The company said it had $167 million in cash on hand, which will provide enough liquidity for Celsius to support “certain” operations during its restructuring.
  • The announcement was made only hours after Celsius paid its remaining debt to DeFi protocol Compound, freeing around $200 million in collateral.
Celsius Swaps Legal Team, Continues to Pay Off Debt
  • Celsius decided to hire new lawyers to advise on its available restructuring options, after reportedly resisting a Chapter 11 bankruptcy advice from previous counsel.
  • The company has also continued to repay its outstanding debt with DeFi lending protocols, and today transferred 20 million USDC to Aave, reducing its total debt to around $215 million.