• Celsius engaged in $800 million ETH staking initiative, causing delays in Ethereum validator queue.
  • The company deposited $745 million worth of ETH into staking contracts, expanding waiting period.
  • Celsius Network faced financial insolvency, leading to restructuring efforts and acquisition by Fahrenheit.

Celsius Network, a crypto lending platform that is facing financial insolvency, recently engaged in an ETH staking initiative worth $800 million. This action has resulted in notable delays within the Ethereum validator queue.

Within a span of two days, the company deposited a staggering $745 million worth of ETH into staking contracts, exacerbating the already extensive waiting period for deploying new validators on the Ethereum network.

Following Ethereum’s Shanghai upgrade, which enabled withdrawals from staking contracts, Celsius is reorganizing its holdings of staked ETH. This deliberate rearrangement has led to a significant expansion of the queue, with the waiting period now extending to 44 days. Moreover, Tom Wan from 21Shares suggests that Celsius’s actions could potentially introduce an additional delay of nearly a week.

According to reports, Celsius Network has recently withdrawn a substantial amount of staked Ethereum (stETH). Prior to this withdrawal, Celsius had approximately 460,000 ETH (equivalent to $870 million) staked with Lido Finance, while they also deployed 160,000 tokens (worth $300 million) in their own staking pool. The reported withdrawal amounted to 428,000 stETH, valued at around $780 million.

Celsius Network’s decision to reshuffle its staked assets aligns with its ongoing restructuring efforts subsequent to filing for bankruptcy protection in July. The company encountered liquidity challenges due to the significant decline in cryptocurrency prices and a surge in user withdrawals.

Meanwhile, in a recent development, the U.S. bankruptcy court conducted an auction of Celsius Network, which was successfully acquired by Fahrenheit, an investment group supported by Arrington Capital. As part of the acquisition, Fahrenheit will assume control over Celsius Network’s assets, including its institutional loan portfolio, staked cryptocurrencies, and crypto mining units.

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