Celsius Pays Off MakerDAO Debt, Moves $500M of Bitcoin to FTX

Embattled crypto lender Celsius Network has paid off its debt to MakerDAO, a sign the platform is recovering from its recent near-death experience.

On July 7, Celsius repaid the remaining $41.2 million in DAI it had borrowed from the collateralized debt protocol, according to data on DeFi Explore, an analytics platform. It then proceeded to withdraw all the wrapped Bitcoin (WBTC) it had put up as collateral for the loan. Celsius later transferred more than $500M in wrapped Bitcoin to crypto exchange FTX.

In the past week, Celsius has been aggressively paying down its debt and freeing up assets locked in MakerDAO. Since July 2, it has paid down $190 million in DAI owed to the protocol and withdrawn 23,000 wrapped Bitcoin, worth nearly $450M. Bitcoin was changing hands at $21,361 in afternoon trading New York time.

The news comes roughly four weeks after Celsius appeared to be at significant risk of insolvency.

On June 13, Celsius suddenly suspended customer withdrawals citing extreme market conditions. That same day, crypto reporter Wu Blockchain tweeted that Celsius’ address represented the largest personal debt position on MakerDAO, with 278M DAI borrowed against 17,919.37 WBTC with a liquidation price of $22,584.

Some observers took note of Celsius’ decision to move such a large amount of WBTC to FTX.

“Also worth considering: if $WBTC volume doesn’t spike, Celsius might be moving funds to fresh [accounts],” Blockanalia, of analytics firm Nansen, tweeted. “After this, I basically think of FTX as Tornado,” he added, referring to the privacy-enhancing protocol often used by those trying to obscure the on-chain movement of their assets.

Leighton Cusack, the co-founder of PoolTogether Inc., saw the move as vindication for decentralized finance, noting that among its lenders, Celsius has only paid back DeFi protocols Aave, Compound and MakerDAO.

“Smart contracts have a higher liquidation preference than any paper agreement,” he tweeted. “DeFi protects you from Celsius”