- Celsius has filed an action against StakeHound to get his staked tokens back.
- The native token, CEL, now has no market liquidity.
In a file in court dated July 11, bankrupt crypto lender Celsius Network [CEL] filed a lawsuit against the liquid staking platform StakeHound. The lawsuit alleged that StakeHound failed to return tokens worth $150 million that rightfully belong to Celsius Network.
Read Celsius Network’s [CEL] Price forecast 2023-2024
Celsius claimed that at various times between January 2021 and April 2021 it has staked 25,000 native ETH (worth more than $50 million), 35,000 native ETH (worth more than $70 million), 40 million native MATIC tokens (to value in excess of $30 million) to StakeHound. ) and 66,000 native DOT tokens (worth more than $300,000), for which it received “stTokens”.
According to Celsius, these stTokens “could be deployed in other investments and presented to StakeHound when the customer demands the return of their Native Tokens (plus rewards).”
According to the filing, StakeHound initiated arbitration proceedings in Switzerland when the network made demands for its staked tokens. The company claimed that it is “under no obligation to exchange native ETH for the stTokens it previously issued to Celsius.”
Celsius further alleged that StakeHound’s arbitration proceeding violated Section 362 of the United States Bankruptcy Code. It prohibits creditors from taking legal action against or collecting debts from a company that has filed for bankruptcy.
Poor liquidity conditions can jeopardize the market
Last month, Celsius received approval from a US bankruptcy court to initiate the sale or conversion of its crypto holdings. An assessment of the company’s portfolio Nansen revealed that it began moving its second-hand altcoins to new wallets on July 5.
Is your wallet green? Check out the Celsius Network Profit Calculator
Into a new one report, research firm Kaiko noted that the Celsius altcoin liquidations could put pressure on the crypto markets in the near term. The altcoin holdings made up of assets such as Bitcoin Cash (BCH), Litecoin (LTC), Stellar (XLM), Solana (SOL), etc., have all seen their value drop significantly over the past year.
According to Kaiko:
“While there are no details on buy and sell prices or the execution venues, the impact on the market could be significant, especially given that liquidity for these tokens has fallen over the past year. The aggregated market depth for Celsius altcoin holdings has decreased by 40% since 2022, totaling about $90 million in early July.
Regarding the troubled lender’s CEL tokens, Kaiko stated:
“There is virtually no liquidity for CEL, as measured by market depth, which has collapsed to just $30,000, mostly concentrated on OKX and Bybit.”
Source: Kaiko
