Celsius Network, a cryptocurrency lending and borrowing platform, has made a controversial move by channeling $75 million worth of Ether to Figment, a staking service provider, despite being in a state of bankruptcy.
The decision to transfer such a substantial amount of Ether to Figment has raised eyebrows within the crypto community, as creditors and stakeholders of Celsius Network question the handling of the company’s assets during its bankruptcy proceedings.
Figment, known for its staking services that allow users to earn rewards by participating in the proof-of-stake consensus of various blockchain networks, has received the significant Ether deposit from Celsius Network. The move suggests that Celsius Network is exploring opportunities to generate additional income through staking services even in its financially distressed state.
Creditors and stakeholders of Celsius Network are concerned about the distribution of assets and the potential impact on their ability to recover funds owed to them. Some have raised questions about the legality and fairness of such transactions, especially considering the ongoing bankruptcy proceedings.
The bankruptcy of Celsius Network has already created a sense of unease within the crypto lending and borrowing space, as investors and customers face uncertainties regarding the return of their funds. The recent allocation of a substantial amount of Ether to a staking service has added fuel to the fire, with critics arguing that it may further complicate the asset recovery process and disadvantage creditors.
Celsius Network, prior to its bankruptcy, had been a popular platform for cryptocurrency lending and borrowing services, offering attractive interest rates and rewards to its users. However, its financial troubles have put its credibility and handling of assets under scrutiny.
As the situation unfolds, stakeholders and creditors of Celsius Network will closely monitor the proceedings and seek clarity on the rationale behind the allocation of significant assets to staking services. The outcome of the bankruptcy proceedings will determine the fate of the funds and the impact on the affected parties, potentially setting a precedent for similar cases in the cryptocurrency industry.
