After the successful bankruptcy reorganization of Celsius, a cryptocurrency lending platform that was once valued at $3 billion, Celsius Network began token burning operations on April 30th, destroying up to 94% of its held $CEL tokens.
In July 2022, the cryptocurrency lending platform Celsius, previously valued at $3 billion, filed for Chapter 11 bankruptcy reorganization in the United States. As part of the reorganization plan called “MiningCo Transaction,” Celsius aimed to improve creditor repayment by establishing a company focused on Bitcoin mining. The plan was approved by the court in December of the previous year and officially emerged from bankruptcy in January, distributing over $3 billion worth of cryptocurrency and fiat currency to Celsius’ creditors.
It is worth mentioning that Celsius submitted an application in September 2023, stating its intention to destroy all of its held $CEL tokens upon the effective date of the reorganization plan.
On April 30th, Celsius Network began the token burning operation, destroying its held $CEL tokens. According to information from Etherscan, Celsius completed the token burning by sending 6.522 billion $CEL tokens to an empty address. The amount destroyed in this operation accounted for 94% of the previous total supply, totaling 6.928 billion $CEL tokens. Based on the current market price, these tokens are valued at approximately $415 million.
After this transaction, the remaining supply of $CEL decreased to approximately 40.6 million, according to data from CoinGecko. Additionally, according to data provided by arkham, the token sending transaction originated from a wallet controlled by Celsius, confirming that the sending address indeed belongs to Celsius.
In the reorganization plan, Celsius asserted that regardless of its final decision on how to handle these tokens, it believes that each $CEL token should be assigned a specific value of $0.25.
Following the burning of tokens, Celsius emphasized that it can only destroy the tokens it holds and highlighted that it cannot “cancel” all $CEL token transactions or halt trading on exchanges. As a result, after the news broke, $CEL experienced a staggering surge in value starting on April 30th, skyrocketing by 291% within a week, from $0.13 to $0.58. The price even increased by 90% within a single day, with the current reported price at $0.5899.
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