Celsius refunds $10 million DAI to Compound

key takeaways

  • Celsius made a $10 million payment to Compound Finance today, likely attempting to take a step toward solvency.
  • Celsius disabled withdrawals, transactions, and swaps a week ago. You have not yet re-enabled those services.
  • The price of the Celsius CEL token is rising, but this is likely due to a short contraction rather than a genuine recovery.

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Celsius made a significant payment to Compound today as it transferred $10 million of DAI to the latter service.

Celsius pays $10 million

Celsius has sent $10 million of the ICD stablecoin to Compound Finance, a popular DeFi service that earns interest.

the etherscan block explorer notes that the company refunded 10 million DAI and at the same time collected 166 COMP ($5,200). Celsius has also made a number of other payments over the past week. In a series of transactions, he paid $53.6 million DAI to his vault with Oasis Protocolanother profitable DeFi platform.

Celsius uses various DeFi protocols to generate interest for its clients. Your latest payment of $10 million probably means you are closing positions with those services to recover liquidity and reopen withdrawals for your clients. Although this is likely a step toward solvency, today’s $10 million payment represents only a small fraction of Celsius’s activity.

The week of May 6, for example, the company saw $397 million in inflows and $1 billion in outflows. As such, the company may continue to be unable to afford withdrawals if demand remains too high.

Update posted in Celsius 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 and confirmed that the suspension will continue.

“Our goal remains to stabilize our liquidity and operations,” the firm wrote on June 19. He added that this “will take time” and that he “will continue to work day and night.”

Celsius also said it will cooperate with regulators and officials. Last week, regulators in four US states started an investigation of the situation.

Celsius added that he would be pausing the Twitter slots and AMAs to prioritize resolving the current situation.

CEL prices are rising

Celsius’s decision to suspend trading caused a panic in the cryptocurrency market as Bitcoin prices fell sharply. The BTC price started at $28,000 on June 12, but fell below $18,000 during the week. BTC is valued at $20,500 at time of writing.

Investors appear to be increasingly dissatisfied with Celsius’s course of action. Social network users are trying to organize a short squeeze to artificially push up prices and take advantage of the short-lived advantage that might result.

In fact, the value of Celsius’s native token has increased since the company announced it would freeze funds. The price of the CEL fell from $0.44 to $0.15 on June 12. It is now valued at $0.94.

It appears that this rally is largely due to attempted short selling. However, if Celsius manages to reopen the services, it could help the asset recover its rightful value.

Disclosure: At the time of writing, the author of this article owned BTC, ETH, and other cryptocurrencies.

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