Ceffu Withdraws $120M from Ethena Custody Wallets in One Day

In a move that's raised eyebrows in the crypto world, institutional custodian Ceffu has withdrawn $120 million worth of USDC from Ethena's Coinbase Prime custody wallets. According to blockchain tracker Onchain Lens, this was done through six separate transactions over the course of just one day.

Ethena is a protocol behind the synthetic dollar valued at over $4 billion, and it relies on hedged investments and off-exchange settlement providers to protect collateral received. The fact that such a large transfer occurred without explanation has left some wondering about the stability of this framework.

The withdrawal points to the importance of custody rails in the institutional crypto market, where institutions prefer to use third-party custodians instead of holding assets on exchanges directly. Ceffu is Binance's only partner for institutional custody and has been offering its services since December 2021.

Ethena considers Ceffu one of its off-exchange settlement providers, along with Copper and Fireblocks, which hold collateral without beneficial ownership. The protocol states that disruption to a provider's availability should not affect the value of $USDe's backing.