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Celsius Network Burns 94% of CEL Token Supply After Exiting Bankruptcy
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Celsius Network, a previously under attack cryptocurrency lending platform, burned 652.2 million CEL tokens, representing 94% of the total token supply.
The transaction, which took place on April 30, sent the tokens to a null address, effectively removing them from circulation.
According to data from Etherscan, the burned tokens were valued at approximately $83.2 million based on the current market price. The transaction originated from a wallet controlled by Celsius, as identified by Arkham Intelligence data.
The fire reduced the remaining supply of tokens to 40.6 million CEL, as per updated data on CoinGecko. This significant reduction in supply has implications for the market value of CEL, as a decrease in supply coupled with sustained demand could potentially lead to an increase in prices.
In the hours surrounding the burn operation, the value of the CEL went from 13.0 to 13.7 cents, with an increase of 5%. However, this change is less noticeable when considering the broader cryptocurrency market’s performance over the same 24-hour period, with the entire market experiencing a decline of 4.4% and the price of CEL falling by 5 ,3%.
Celsius Network’s decision to burn its holdings in CEL is in line with that of the company failure filing the case from September 2023. In the filing, Celsius stated its intention to burn all CEL tokens in its possession on the effective date of the reorganization plan. The company clarified that it could only burn tokens under its control and could not “wipe” all CEL tokens or prevent trading on exchanges.
Token burn was used as an argument by Celsius to justify assigning a value of $0.25 per token to CEL, regardless of the company’s actions regarding its holdings.
In early February, Celsius announced plans to do so distribute $3 billion in cryptocurrencies to creditorsalthough the company did not explicitly mention token burn in its public announcement on the effective date.
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