Celsius Network, a decentralized finance (DeFi) platform and one of the largest crypto lenders, publication On Sunday night, I was “pausing all withdrawals, exchanges, and transfers between accounts.” It has 1.7 million customers.
The company’s token, CEL, is trading at 23 cents at the time of this writing. According to CoinMarketCap.. This is a 92% decrease from April 8th, when CEL was worth $ 3. The token was worth almost $ 7 a year ago.
I had a question High yield of Celsius NetworksConnection to Failed stablecoinTerra, And its reserves. The value of assets on the platform halved from $ 24 billion in December 2021 to $ 12 billion in May. Between March and May, the system leaked $ 1 billion. Financial Times report..
In a blog post on June 7th, “Destruction destruction“The company said. “Celsius has a reserve (and more than sufficient ETH) to meet its obligations, as set out by our comprehensive liquidity risk management framework.”
It was that time. On June 12th, emails to all customers began as follows:
Due to extreme market conditions, Celsius today announced that it will suspend all withdrawals, exchanges and transfers between accounts. We are taking this action today to put Celsius in a better position to respect its withdrawal obligations in the long run.
In theory, Celsius works much like a regular bank, except for cryptocurrencies. Collect and lend deposits.Ann Advertising on Celsius’s site At the time of writing this, I provided an 18.63 year interest rate on cryptocurrency deposits.Unlike banks, they don’t have Celsius FDIC Government Insurance Protect people in the event of a bank failure.
Skeptics have repeatedly warned that the Celsius Network must fail.Some even claimed it Celsius is a Ponzi scheme..
Due to its size, Celsius touches on many other parts of the crypto market. for example, Celsius Network borrowed $ 500 million from Tether, Dolpegg stablecoin. (The loan was originally $ 1 billion, Bloomberg reported.. ) The loan is secured by Bitcoin. “If Bitcoin falls, they give us a margin call [and then] We need to offer more Bitcoin, “said Alex Masinsky, CEO of Celsius. Said Financial Times last year..
Even investors who are not directly involved in cryptocurrencies are exposed to Celsius. Canada’s second largest pension fund, the Quebec Investment Trust Bank (CDPQ), Invested as part of a $ 400 million equity round For the company.
Regulators are interested in running the Celsius Network. Only September 17, 2021, New Jersey issues a cease and desist order to the Celsius network, Texas plans a hearing to decide whether to issue a cease and desist, Alabama should not be banned by Celsius within a month I asked why. In October 2021, Attorney General of New York Letitia James included the company as one of its platforms. Requested to provide information about its activities and productsCelsius said he is working with state regulators.
There are more. The Celsius CFO arrested in Israel In November on suspicion of money laundering, fraud and sexual assault. (These claims were about his actions in his previous job; he Suspended in Celsius After arrest. ) When the DeFi platform Badger DAO was hacked in December Blockchain activity It has been shown that the Celsius network has lost $ 54 million worth of cryptography.Celsius Claimed client and user assets were unaffected..
of Notes to customers“The ultimate goal is to stabilize liquidity,” said Celsius. He warns that “this process is time consuming and can cause delays,” and does not indicate the dates on which customers may expect to withdraw again.