<p><span style="font-weight: 400;">Crypto lending business Celsius had at least half a billion dollars of funds parked in Anchor Protocol but appears to have pulled all of it out over a frantic 24 hour period earlier this week. </span></p> <p><span style="font-weight: 400;">Wallets controlled by Celsius sent at least 261,000 ETH ($535 million at current prices) to Anchor Protocol over the past five months, according to analysis conducted by The Block Research and Hoptrail, a blockchain data firm. The same analysis and comments from a person close to the situation suggest, however, that Celsius was able to withdraw the entirety of those funds. </span></p> <p><span style="font-weight: 400;">Celsius allows retail investors to earn interest on their crypto holdings, advertising interest rates of up to 17%. According to its website, the company serves 1.7 million customers. </span></p> <p><span style="font-weight: 400;">Terra’s Anchor Protocol has offered yields of up to 20% to depositors of TerraUSD (UST), the Terra-native algorithmic stablecoin. The Terra ecosystem was thrown into chaos earlier this week when </span><a href="https://www.theblockcrypto.com/post/146309/luna-terra-ust-terrausd-markets-crypto-blockchain"><span style="font-weight: 400;">UST de-pegged sharply</span></a><span style="font-weight: 400;"> from the price of one US dollar, </span><a href="https://www.theblockcrypto.com/post/146318/anchor-token-plunges-70-amid-worsening-ust-and-luna-crisis"><span style="font-weight: 400;">putting Anchor Protocol under major pressure</span></a><span style="font-weight: 400;">. The Terra blockchain was </span><a href="https://www.theblockcrypto.com/linked/146722/terra-says-it-has-halted-blockchain-for-second-time-in-24-hours"><span style="font-weight: 400;">twice halted</span></a><span style="font-weight: 400;"> on May 12. </span></p> <p><span style="font-weight: 400;">Celsius's deposits began on December 19, with </span><a href="https://etherscan.io/address/0x512986a575c5cdc9a77ee99f388d7634dd1587ff"><span style="font-weight: 400;">146,000 ETH deposited</span></a> <a href="https://finder.terra.money/columbus-5/address/terra1aw0xgq4cu0jwnunp3sv6gx2zuxef7r2n6mgqll"><span style="font-weight: 400;">through March 17</span></a><span style="font-weight: 400;">. The pace then accelerated, with a further </span><a href="https://etherscan.io/address/0xb721a1dce5556fbf0195eea6330e206c76a562e8"><span style="font-weight: 400;">115,000 ETH deposited</span></a> <a href="https://finder.terra.money/columbus-5/address/terra1nf6dw2hv5kzkmcjexuerxdvxzacq7m32la2kgd"><span style="font-weight: 400;">between April 6 and May 3</span></a><span style="font-weight: 400;">. </span></p> <p><span style="font-weight: 400;">But the company appears to have escaped before UST’s collapse. Early on May 11, </span><a href="https://www.theblockcrypto.com/post/146309/luna-terra-ust-terrausd-markets-crypto-blockchain"><span style="font-weight: 400;">with Terra’s tokens in freefall</span></a><span style="font-weight: 400;">, the lender </span><a href="https://etherscan.io/address/0xf642ea51c645c48196d9831a5937e95b0e9b4f7f"><span style="font-weight: 400;">withdrew some 225,000 ETH</span></a><span style="font-weight: 400;"> (or $463 million) from Anchor Protocol, according to The Block Research’s analysis. </span></p> <p><span style="font-weight: 400;">While The Block Research was unable to determine whether the remaining funds were withdrawn, a person with direct knowledge of the situation said that there are no Celsius funds left outstanding with Anchor Protocol, implying that the remaining 36,000 ETH (or $74 million) was also withdrawn. </span></p> <p><span style="font-weight: 400;">Celsius itself put out </span><a href="https://twitter.com/CelsiusNetwork/status/1524436048989896710"><span style="font-weight: 400;">the following tweet</span></a><span style="font-weight: 400;"> on May 11. </span></p> <blockquote class="twitter-tweet"> <p dir="ltr" lang="en">As part of our responsibility to serve our community, <a href="https://twitter.com/CelsiusNetwork?ref_src=twsrc%5Etfw">@CelsiusNetwork</a> implemented and abides by robust risk management frameworks to ensure the safety and security of assets on our platform. <br /> <br /> All user funds are safe. We continue to be open for business as usual.</p> — Celsius (@CelsiusNetwork) <a href="https://twitter.com/CelsiusNetwork/status/1524436048989896710?ref_src=twsrc%5Etfw">May 11, 2022</a></blockquote> <p><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></p> <p><span style="font-weight: 400;">“Celsius was relatively OK because they used Bonded ETH (bETH) as collateral to borrow UST, which was then lent to Anchor for yield. In the current situation, this turned out to be safer than buying UST from the market,” said The Block Research’s Igor Igamberdiev. He stressed that his analysis represented a lower estimate of Celsius’s deposits to and withdrawals from Anchor Protocol.</span></p> <p>The process of depositing funds to Anchor Protocol was convoluted. Igamberdiev explained that it involved first staking ETH using Lido to receive Staked ETH (stETH); then sending stETH to Anchor vault on Ethereum in order to mint and send bETH (a token representation of stETH) to Wormhole, a crypto bridge; minting bETH on Terra using Wormhole; before finally depositing bETH to Anchor Protocol.</p> <p><span style="font-weight: 400;">Igamberdiev added that the funds withdrawn from Anchor Protocol by Celsius in the form of Lido stETH were sent to Aave v2, another lending protocol. </span></p> <p><i data-stringify-type="italic">For more breaking stories like this, make sure to follow The Block on </i><i data-stringify-type="italic"><a class="c-link" tabindex="-1" href="https://twitter.com/TheBlock__" target="_blank" rel="noopener noreferrer" data-stringify-link="https://twitter.com/TheBlock__" data-sk="tooltip_parent" data-remove-tab-index="true">Twitter</a></i><i data-stringify-type="italic">.</i></p><br /><span class="copyright"><p>© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.</p> </span>