Bankrupt crypto lender Celsius Network has reportedly resumed staking Ethereum (ETH) through Figment, an institutional-grade staking service, according to Blockchain analytics firm Arkham Intelligence.

The crypto lender transferred more than 40,000 ETH, worth around $75 million, to Figment between May 10 and May 12. It is seen as the largest movement of funds for Celsius since the crypto lending platform filed for Chapter 11 bankruptcy protection in July last year.

Celsius transferred around 40,928 ETH to an aggregation smart contract named Figment ETH2 Beacon Depositor 1, according to blockchain explorer Etherscan. Later, it was forwarded to Ethereum's proof-of-stake Beacon chain's deposit contract.

Since Figment is a non-custodial service, Celsius still holds control of all deposited digital assets, reported CoinDesk.

Tom Wan, a research analyst at digital asset investment product firm 21Shares, said the latest transaction was Celsius' first movement to Figment after one year, noting that the crypto lender could have used its own staking pool for the 40,000 Ether.

Staking refers to a process of locking up crypto, such as Ether, for a specific amount of time to earn rewards for creating blocks and validating transactions on the network.

Celsius could use the proceeds to finance its restructuring plan and repay creditors or it could re-stake the Ether with a different platform. Depositing in a staking service will allow Celsius to earn rewards on its digital asset holdings amid its restructuring plans.

This has come as an unexpected move, considering Celsius also operates one of the largest ETH staking pools with around $290 million of assets under management. The lender's own staking pool received its last deposit in April 2022, a significant amount of time before the bankruptcy filing.

"The interesting part is that they decided to stake with Figment instead of their own staking pool," Wan tweeted.

Celsius was among the crypto firms that collapsed after the unprecedented downfall of blockchain project Terra. The breakdown of Terra's LUNA and UST tokens exposed the Ponzi scheme allegedly perpetrated by Celsius ex-CEO Alex Mashinsky.

After filing for bankruptcy, Celsius said it was exploring plans for restructuring and recovery following allegations that the crypto lender operated in a Ponzi-scheme manner.

In February, the U.S. Bankruptcy Court for the Southern District of New York approved a restructuring plan proposed by Celsius to allow around 85% of customers to receive 72.5% of their crypto back from the platform. However, the U.S. government, a creditors' committee and an ad hoc group of borrowers opposed the proposed extension of its restructuring deadline.

Mashinsky has been embroiled in legal trouble since Celsius' collapse. New York Attorney General Letitia James sued Mashinsky in January for allegedly defrauding investors. The next month, he was sued by creditors, who alleged that Celsius executives cashed out before the downfall of the platform.

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Illustration shows Celsius Network logo and representations of cryptocurrencies
Reuters