Crypto Platform Celsius Pauses Withdrawals

https://blog.celsius.network/a-memo-to-the-celsius-community-59532a06ecc6

by xur17 • 4 years ago

256 147 4 years ago

blog.celsius.network

mdorazio2• 4 years ago

As someone with a decent amount of money in Celsius, this hurts. Not money I need, but still.

mv1234• 4 years ago

If you don't mind my asking, why didn't you withdraw? The writing has been on the wall for weeks, if not months.

mdorazio2• 4 years ago

I only ever held assets in USDC and haven’t been actively tracking anything related to Celsius specifically.

headsoup4• 4 years ago

Definitely not a ponzi scam in the exit stages. Definitely.

jonathan-adly• 4 years ago

Every bear markets brings down a bitconnect. if you get into crypto, at the very least - understand not your keys, not your coins!

quickthrower2• 4 years ago

Cryptocurrency is like the horses. Only for money you can afford to lose. That is all crytpo from Bitcoin to shitcoins with names ending in "Ibu". It is gambling. I have a bit of a flutter on it.

It is worse than stocks as there is no productive value (actually it is the opposite, it costs a fortune to keep the networks running.)

gadnuk• 4 years ago

Seems like a ponzi scheme in crypto collapses almost every other week these days.

It was LUNA in May

Celsius now

Probably USDD soon

A lot of these "fake internet money" coins have no use cases other than trading with the next sucker willing to buy on crypto platforms

And then you have platforms like Coinbase facilitating trading of such "assets" or tokens with little to no due diligence

A lot of these: Failed as a currency Failed as an inflation hedge Failed as a store of value

Crypto bros will try to do whatever mental gymnastics they can to justify their investment, probably because they are all in. But I can't wait for most of these coins to implode for good as they serve no use to society. Comparable to cigarettes (zero health benefits) than wine (harmful in large amounts, has health benefits in moderation).

If someone is offering you a yield of more than 18% APY, then you are the yield to the next guy!

JumpCrisscross• 4 years ago

There seems to be a surplus of capital in our economy. Macroeconomically speaking, crypto is private actors taking the fall for us all.

TrapLord_Rhodo7• 4 years ago

'Taking the fall"?

BTC is still up an incredible amount over the last 5 years. More like created a new tech elite while shaking out the free-loaders every cycle.

tempsy2• 4 years ago

i think VC involvement has made this space far more dangerous now. don’t think Celsius could’ve gotten where they are now without willing VCs pouring hundreds of millions into building the company up despite how risky the entire business model is/was. now this is going to become an existential threat to the whole ecosystem.

ABeeSea• 4 years ago

It also gives obvious nonsense an air of validity. VCs giving several millions to something like StepN is a drop in the bucket for the VC portfolio. But this money makes it seem to an average person that maybe the VCs see something the don’t. So they are now willing to buy in.

I also wonder how much VCs are insider trading their own project’s coins and don’t care about the actual company because they made their profit on the rug pull.

rvz5• 4 years ago

A lot of these: Failed as a currency Failed as an inflation hedge Failed as a store of value

Indeed. I don't know why at the time you had people buying something at >$60K (and I warned them not to [0]) or even so-called soothsaying influencers predicting at the time that it will reach >$100,000 in the same year. [1] or even predicting DOGE reaching $1 by September 2021. [2] Certainly it was to manipulate retail at buying the top and never selling.

So today, where are these 'experts' now? [1][2]

It seems the HODL narrative of Bitcoin as either a 'currency', 'hedge against inflation', and 'store of value' means it is a complete failure and is only useful for speculation. But not all 'coins' (not tokens) are exactly as useless like Bitcoin is.

I would expect the maximalists to keep screaming HODL everywhere to be trending to keep the cult relevant until the next cycle as many of them have bought in at very high prices (Because Musk, Saylor, etc told them to)

[0] https://news.ycombinator.com/item?id=27206314

[1] https://news.ycombinator.com/item?id=25776080

[2] https://news.ycombinator.com/item?id=27046019

technion• 4 years ago

I do not understand how some of these influencers are still influencers at all. Once a person has admitted to taking money to shilling four different rugpulls, how is it considered positive advertising to say "X has thrown his influence behind it!"?

charcircuit6• 4 years ago

If someone is offering you a yield of more than 18% APY

I think you misunderstand what's happening. The 18.63% APY that they are currently offering is on a coin that went down 11.71% today. The rewards are locked for 1 year and are paid in CEL which is down 54.64% today.

The actual yield of the investment in USD is not going to be at a rate to reach 18.63% APY.

paulgb• 4 years ago

I don’t think that contradicts OP’s point, though? If you buy in you’re someone else’s yield. The mechanism for that transfer is that your investment depreciates faster than the yield, while the other person is able to liquidate and you’re not.

throwaheyy• 4 years ago

If someone is offering you a yield of more than 18% APY

TrapLord_Rhodo7• 4 years ago

Economically speaking, nothing in crypto is a new. Only the fact that they obfucate the 'free money' with technical gargon.

Paypal paid was burning hundreds of millions of dollars a month in giving away free money in order for it to gather market share.

landemva• 4 years ago

Implementing AMMs was new to me. I hadn't seen that before.

peyton2• 4 years ago

Consensus capital markets are fairly novel: https://mirror.xyz/alkimiya-protocol.eth/PbTyQ3JnVtGq54fLjDr...

dereg• 4 years ago

This is not true. Here's one example: perpetual swaps weren't a thing until Bitmex implemented them.

tornato72• 4 years ago

To add to what others have said, Flash Loans and Self-Repaying Loans don't have TradFi analogs.

puranjay4• 4 years ago

USDD is next, but Justin has a habit of degening his way out of trouble. Wouldn’t bet completely against him

rvz5• 4 years ago

This is how a rug pull starts and why 'staking' on someone else's platform is a scam. Once they are able to pause withdrawals then you are too late.

Not all of these projects will survive the cryptocurrency crash. We only saw many silly DeFi projects popping everywhere when the market goes up, but I'm very certain that many of them (not all of them) will shut down when the down side comes back.

In general, it looks like the cryptocurrency mania is finally dying again, as expected. [0] Now we will see how long Tether has left before causing more chaos to the cryptocurrency market.

[0] https://news.ycombinator.com/item?id=29444596

tempsy2• 4 years ago

Yeah this is going to be much worse than Luna. Buckle up.

graeme8• 4 years ago

This is all one big crash stemming from the Luna crash. Celsius had invested in Luna, lost some there and lost investors as well in the run for the exits.

One of Celsius’ shareholders and creditors is the stablecoin Tether. This broke its peg when Luna crashed, saw billions in outflows and never regained the peg. Been around 0.9990 for a month give or take when it used to hover a bit above 1.00

Luna crash hit a bunch of balance sheets, now Celsius has to recognize losses and fold. Question is who is next to fold? Probably Nexo, a Celsius clone. And Tether itself will be under immense strain.

xur172• 4 years ago

I think it's a mix of things in this case. They likely lost money in Luna, and there is a rumor they have some ETH deposits stored in stETH (staked ETH that won't be fully withdrawable until at least 1 hard fork after the merge, and hence trades at a slight loss right now).

graeme8• 4 years ago

That’s their most visible difficulty but the heart of their problem is they were a ponzi. They promised rates of interest they could not earn in the marketplace, so redemptions were made from new deposits.

Luna sparked a run for the exits, hence they could no longer meet withdrawals from new money.

iskander• 4 years ago

An additional concern about their stETH is whether they generating high yields via the dubious strategy of "recursive staking": stake ETH to get back stETH, borrow ETH using your stETH as collateral, stake the borrowed ETH to get more stETH (repeat). This is very sensitive to the stETH:ETH exchange -- there's some suspicion that Celsius is (or at least was recently) in danger of mass liquidation as the stETH:ETH exchange rate drifts downwards.

charcircuit6• 4 years ago

Tether didn't depeg. Since there is a 0.1% fee when redeeming Tether redeeming Tether can only bring up the price to $0.999. You need demand for Tether to increase to bring it up to $1.

gammarator2• 4 years ago

https://coinmarketcap.com/currencies/tether/ claims it hit a low of $0.97.

TrapLord_Rhodo7• 4 years ago

Tether totally depegged. During the Luna collapse, it got down to .87 in 4 pool and a couple other DEX's. Technically, There is no 'Peg', it only exists because of arbitrage.

graeme8• 4 years ago

They normally fluctuate a bit above/below $1. Show me a one month period when they’ve been this consistently below $1.

They may have had one longer period, when they lost their bank account access….other than that this is the record. It is novel

PontifexMinimus• 4 years ago

stablecoin

Wouldn't it be more accurate to call these unstablecoins?

m00dy2• 4 years ago

we shouldn't. Each of them has its own characteristic therefore the risk is different.

m00dy2• 4 years ago

It is funny to see that people think 0.9990 is a depegged. I'm almost sure in your machine learning models, you have much worse error rate :)

devoutsalsa• 4 years ago

I'd guess the 0.999 price just indicates more selling pressure than buying pressure. The market cap of USDT has been trending downwards over the past 2-ish months.

puranjay4• 4 years ago

In low confidence systems, 0.99 can cause a bank run and eventual death spiral.

reducesuffering• 4 years ago

Take a look at the 3 month or 1 year chart: https://coinmarketcap.com/currencies/tether/

highwaylights• 4 years ago

This is not a risk to Tether.

They can just issue more Tethers to cover any market turbulence so that the price stays stable. You need to understand that these drawdowns cause an inflection in demand that drives monetary energy into the asset class, ultimately causing more large corporations and institutions to enter the market and driving growth in the prices. This all raises bullish sentiment.

Totally unrelated, but I was broke and homeless and I trusted all my money to this guy Mike J from a comment in the YouTube video that taught me all of the above. I haven't heard from him in a while but that just means he's busy and I'm sure it's going swell.

Sigh, it's like you technology types still don't get it after all these years.

the *clap* future *clap* of *clap* money

zzleeper• 4 years ago

The first half of your post might be the median crypto twitter comment.. must admit I almost felt for it.

gammarator2• 4 years ago

Five days ago: “Celsius continues to process withdrawals without delay.” https://blog.celsius.network/damn-the-torpedoes-full-speed-a...

erung88• 4 years ago

In retrospect, that blog post seems to be a good hint the withdrawals will be paused soon.

tenpies2• 4 years ago

Crypto is so disruptive it just re-invented the bank run.

For reference, if you ever see a bank say this, it's probably a good idea to get to an ATM post-haste and withdrawal as much as you possible can.

jakelazaroff• 4 years ago

You probably still don’t have to worry: cash in a bank is insured up to $250k per ownership category by the FDIC. Even your (traditional) investments are protected against by the SIPC in case your broker goes out of business.

If your crypto exchange goes away, you, of course, just lose everything.

matheusmoreira• 4 years ago

Crypto reinvented the entire banking system, they're just called exchanges now. It's sad that the projects that were meant to put an end to all that ended up making the same mistakes.

vishnugupta2• 4 years ago

The inflation data was unexpectedly bad, despite the recent rate hike there’s no sign of the economy cooling down. So folks are expecting fed rates to get to as high as 5%. Naturally all other financial markets are adjusting sharply to this. In crypto, get-rich-quick schemes will be the first ones to fall.

Fed folks changed their stance from “soft” landing to “softish”, meaning they are falling short of calling for recession.

Next 18 months are going to get very bumpy.

rvz5• 4 years ago

Certainly.

The time to prepare for this was in November - December 2021. [0] When the market euphoria was going close to its peak of peaks. Look at the responses then in [0]: 'Stock market up 1% today' on a daily chart. When I said it already started months ago [1], some point to data about the Fed 'official' announcements of being in (and defining) a recession and even still boldly suggesting afterwards: 'We are most certainly not in a recession.'

This is how the 99% think.

The problem is as with many of the commenters at the time still failed to understand is, you never, never, NEVER wait for the news to come out to prepare then or look at 'daily charts'.

You must prepare and expect for anything unexpected in the long term in advance, such as months or a year for events just like this. Uncertainty is frowned upon, especially when it is prolonged.

[0] https://news.ycombinator.com/item?id=29508238

[1] https://news.ycombinator.com/item?id=31441710

joosters• 4 years ago

When the market euphoria was going close to its peak of peaks

You only know it was a peak after it peaks. So your advice just boils down to 'sell before the price goes down'. What an insight!

boc• 4 years ago

Counter-point is that the accepted history of the Volker interest rate hike might be bad economics, and that it was actually the oil price reductions that happened simultaneously which caused disinflation. If the Fed's research behind the scenes is convinced that this is the case, they might run rates dovishly and hope for KSA to save the day.

Energy price shocks ripple across every part of the economy at high speeds, causing inflation in unexpected places.

Point is that there's an outside chance that aggressive interest rate hikes are deemed unnecessary when combatting inflation.

vishnugupta2• 4 years ago

Funnily almost exactly a year ago I was feeling uneasy about the whole frothy job market and was looking around for signals to locate the moment in a business cycle. Back then [1], Fed was signalling that they'd begin rate hikes by 2023. Hindsight; fed acted couple of quarters too late IMO. They completely evaded or invented new ways ("transitory") to describe scorching inflation as early as one year ago that was experienced by people on ground. And when the data came in around Nov 2021 they began to be getting their acts together but by then it was way too late.

Though I agree with you; it's not straightforward. No one expected Putin to invade Ukraine, so there's that. But the signs of fed rate hike was clear IMO. If one wanted to be prepared and forego some of the profit they had about an year to prepare.

[1] https://www.aljazeera.com/economy/2021/6/16/federal-reserve-...

paganel• 4 years ago

and that it was actually the oil price reductions that happened simultaneously which caused disinflation.

Hopefully the powers that be also know that, hence Biden's planned visit to Saudi Arabia [1], plus the NATO secretary general saying this weekend that "peace is possible" in Ukraine, certainly a different mindset than the one present among most of the Western leaders about two months ago (when going all in in order to get Putin down was presented as a plausible solution). We'll see what the future will bring.

[1] https://www.wsj.com/articles/white-house-set-to-announce-bid...

[2] https://www.youtube.com/watch?v=KUGY692OT6g (the quote I mentioned is made at the start of the video)

0xB31B1B• 4 years ago

What is Celsius and why is is breaking down?

glerk2• 4 years ago

Celsius is (was?) a centralized platform promising users high yields in exchange for them depositing crypto assets into a sort of savings account. Nobody really knew what Celsius was doing with those funds. It looks like the funds were invested in some risky ventures (such as the Anchor Protocol, which collapsed following the LUNA debacle), and Celsius is now insolvent.

b0sk• 4 years ago

Web3 is going great!

headsoup4• 4 years ago

Oh of course, we're now into the phase of 'of course this had to happen, and is necessary, to shake out the dodgy bits so we can go to the moon tomorrow!'

danrocks2• 4 years ago

https://web3isgoinggreat.com/

alismayilov• 4 years ago

Is celsius.network similar to crypto.com? I see crypto.com advertisements at many big sport events, including F1, UFC, etc. I am wondering how is their business doing at this current market.

a_square_peg• 4 years ago

The post-2017 rise of Bitcoin and printing of Tether seemed to have all started around mid-2020 with Fed's lowering of interest rate in response to Covid19. Now that the macroeconomic condition is changing to reign in the inflation, it seems to make sense that the money that flowed into these speculative narratives will flow out and we'll finally see who has been swimming naked...

propter_hoc• 4 years ago

The irksome thing here for me, as a resident of Quebec, is that our provincial pension plan recently invested heavily in this project. That's a not insignificant amount of retiree money gambled irresponsibly and lost within months.

Ironically, just as the pension plan announced its investment, the provincial securities regulator announced that they're investigating Celsius for violating securities laws.

Just an embarrassment of a situation overall... Details here (in French): https://ici.radio-canada.ca/recit-numerique/4095/caisse-depo...

dubswithus2• 4 years ago

However, our investigation shows that the Caisse's contribution to this round of financing amounts to $150 million. According to documents released by Celsius to financial authorities in Britain, CDPQ acquired 7,328 Series B shares of the company, at a price of $20,469 each.

Yikes.

graeme8• 4 years ago

Oh thank goodness. I actually thought we put in $600 million

tenpies2• 4 years ago

They also nailed their timing in getting out of oil and gas - just in time for the sector at large to see a face-ripping rally and some of the best cashflows in any industry.

Most fund managers would be fired, or quit, but because it's Green(TM), it was fine and good.

https://www.thestar.com/business/2021/09/28/canadas-oil-indu...

The take away for all Canadians (the CPP is just as bad) is that these pension funds are just one more tax. You will be paid out, just nowhere near commensurate with what you put in.

And that's even before the comical "inflation" adjustments and the intentional lack of currency hedge.

rohitb91• 4 years ago

Wow

Will there be riots over the mismanagement of the wealth of millions of people? How much have these incompetent managers destroyed? Esg is a cancer to society.

soperj2• 4 years ago

It's pretty clear here that you have no idea what you're talking about. These pensions are only available for public service workers, and they have a long history of doing quite well despite the obvious mis-steps.

shuckles• 4 years ago

Is it just me or Canadian pension plans seem to be involved in a disproportionate share of dubious late stage tech investments? The Ontario Teachers' Pension Plan has an extensive Crunchbase page. Are there differences in regulations between the United States and Canada?

peyton2• 4 years ago

Looks like they like to go direct to “save on management fees” and “pursue environmental goals,” so they probably get excluded from good deals.

ypzhang2• 4 years ago

Look up the "Canadian Model".

Canadian Pensions like OTPP are run more like private equity funds and they compensate their employees the same way in order to compete in terms of talent in order to generate deal-flow and deal identification.

Traditionally, this has meant above market returns and is one of the reasons that Canadian pensions are generally well funded.

This highlights the difference:

https://blogs.cfainstitute.org/investor/2016/05/17/lessons-f...

puranjay4• 4 years ago

They bought the top of a bunch of (unprofitable) Indian tech startups as well.

slyall• 4 years ago

OTPP bought the New Zealand Yellow pages for $US 1.6 billion in 2007[1]. Perfectly timed just as the Internet and Mobile phones took over everything (and just before the GFC hit). Just 3 years later it was a complete mess.[2]

[1] https://www.forbes.com/2007/03/27/nz-yellow-pages-markets-eq...

[2] https://www.stuff.co.nz/business/money/64397212/yellow-direc...

nradov• 4 years ago

This is one of the reasons why defined-benefit pension plans need to be eliminated and replaced with defined-contribution plans. Pensions like this are just too risky and create terrible moral hazards.

Scoundreller• 4 years ago

the biggest moral hazard with defined-benefit plans is making decisions that increase your own personal longevity. The reality is that most Canadian plans have some levers available to cut benefits (primarily by making inflation indexing discretionary).

moneywoes• 4 years ago

There's gonna be a method to recall these people right?

Animats4• 4 years ago

The hype: "Lenders have a lot to gain when they join Celsius. The platform pays out rewards as high as a 17% yield. These rewards are calculated by the system based on your loan terms and paid out every Monday."

This is like a junk bond. You get a high yield in exchange for a risk of loss of the principal. So junk bonds require due diligence to price. You don't buy just one kind; you buy a diversified collection in hopes that they don't all go bust at once. In 2008, mortgage-backed securities did all go bust at once.

In crypto land these things are blind pools. Customers have no idea where the pool operator is investing, and to what risks they are exposed. This is why there is a requirement for SEC registration.

That's if it's honest. It might be an out and out Ponzi, like Madoff's.

What the crypto crowd does not seem to get is that none of this is new. These are all old ideas in finance. In the 1920s, retail investors were being offered similar blind pools.

haimez2• 4 years ago

It’s kind of like the (public!!!) shares or options companies offered before the dot com boom. Too good to be true.

Animats4• 4 years ago

No, it's not. This is a high risk loan. Limited upside, unlimited downside.

37ef_ced3• 4 years ago

Animats, I was a fan of your Downside site: http://downside.com/

Downside's goal is to remind people that we're experiencing a financial bubble, and that financial bubbles always burst. (We originally wrote that in April, 2000. Any questions?)

And here we are, living through another huge bubble.

piva002• 4 years ago

Nowadays we are a bit more sophisticated and call it "the business cycle". It's totally normal and the people hurt during the process are doing it for the greater cause of the free market™, don't worry, they love it.

puranjay4• 4 years ago

Reminder that the second largest pension fund in Canada invested in Celsius at a 4B valuation.

There really needs to be more oversight on what these funds invest in.

soperj2• 4 years ago

Honestly, every time I hear of the Quebec Pension fund it seems like they're doing something that makes no sense at all.

salmonlogs2• 4 years ago

Quick Google shows Quebec Pension Fund managed circa ~$325B. They will invest across a range of asset classes and risk profiles.

Looks like they put around $200M into Celsius which is about 0.06% of their AUM.

Numbers might not be totally accurate but order of magnitude shows the scale of these funds and how they choose high risk to try and get some return for their beneficiaries.

(Note: I'm not condoning investment into Celsius/crypto in general; just making a point on the investment scale)

tornato72• 4 years ago

In crypto land these things are blind pools. Customers have no idea where the pool operator is investing

This is factually incorrect. Celsius' addresses are publicly tagged on Etherscan[1], and everyone can see exactly where they are investing, just like most other 'pools' of the sort. Celsius Network is also SEC registered[2].

1. https://etherscan.io/address/0x8aceab8167c80cb8b3de7fa6228b8...

2. https://sec.report/CIK/0001739052

Animats4• 4 years ago

They registered their stock as offered only to qualified investors per Rule 506(c). So all they had to file is a Form D, which has a name and address and not much else.

Their loan system isn't registered as a security. They even say "Earn accounts have not been registered under the Securities Act and may not be offered or sold in the United States, to U.S. persons, for the account or benefit of a U.S. person or in any jurisdiction in which such offer would be prohibited." But not prominently on their home page.

They will get to explain to the SEC why they have the US toll-free number "1-866-HODL-NOW" and are on the Apple Play Store for the US.

Yes, you can look at their transaction log, but it's doesn't tell you all that much. 7 hours ago, they sent 50,000 ETH to somebody.[1] Some people are "paused" less than others, apparently. Someone noted this on Twitter[2]

[1] https://etherscan.io/tx/0xf9e0788094c0bbfdc61ed2fbcf79dfcd4d...

[2] https://twitter.com/btcinchina/status/1536186927707066368

nullc• 4 years ago

This is like a junk bond.

More like a HYIP feeder fund, and considering reports that they were investing in things like Luna/Anchor it sounds like a fair description.

Madoff had feeder funds too, they're critical to reach the entire market-- as there are people who won't invest in the HYIPs directly but will once they've been laundered through a middleman who reduces the yield, making them somewhat more plausible.

rdl2• 4 years ago

I kept a lot of money on them in 2021; was nice getting $1-2k/wk in "free money". I knew the risks, and have worked in the industry since before it was an industry, so no excuses.

I pulled all my money from them (except $600 or so in dust) on Thanksgiving 2021. Thankful to (God? my minimally sufficient sense of self preservation finally kicking in?) for timing; and to their credit, it was a flawless withdrawal.

But yeah; inevitable things happen, just often takes longer than one would expect.

yunohn2• 4 years ago

So you’re saying you knew it was an “inevitable” scam, and you’re happy that you were able to withdraw your earnings before a massive crash?

I’m not surprised, I hear this exact thought process from a lot of crypto maximalists.

syspec• 4 years ago

I get the sense that his post was mostly just an excuse to flex on his gains

johnisgood• 4 years ago

What makes it an inevitable scam? People have a weird perspective on cryptocurrencies. I know that some people hold the belief that if they put some money in then if they get lucky they will be able to withdraw 10% of that, but I believe that it really is not what it is about. Welp.

rdl2• 4 years ago

Celsius specifically; they were offering an income return for holding crypto (during a period of crypto appreciation), and the income was nice but ultimately not worth the principal risk. It was a long enough running business, with track record of allowing withdrawals, that the perceived risk wasn't as high as the real risk.

thepasswordis2• 4 years ago

Full disclosure: I'm a crypto hyper-bull.

That said: these weird DeFi platforms that were getting like 20% of whatever yields never made any sense to me.

20% isn't that great. You can get 15% on basic blackrock/vanguard funds.

I just never could understand why people would tolerate this sort of risk for that little reward.

headsoup4• 4 years ago

What is a 'crypto hyper-bull?'

djbusby• 4 years ago

Very enthusiastic about the future and positive return on crypto.

glerk2• 4 years ago

Celsius is not even a DeFi platform. It is some company that was promising users high yields without providing any transparency about how the deposited funds were invested.

Also, a lot of the rewards were paid out in Celsius’ own token (CEL) which is now almost worthless.

The risk/reward ratio was definitely not very good.

yunohn2• 4 years ago

20% isn't that great. You can get 15% on basic blackrock/vanguard funds.

There’s a massive honking difference between a guaranteed 20% derived from lending fees versus potential market returns of 15%.

thepasswordis2• 4 years ago

The change in my net worth doesn't care where the money comes from.

gus_massa• 4 years ago

Note that "guaranteed 20%" is just a promise of 20% if it does not collapse. It's more like or "up to 20% or less".

outside1234• 4 years ago

How is that even legal?

aero-glide2• 4 years ago

Feature request : option to toggle off crypto news in HN

jensenbox• 4 years ago

This feels a lot like a prediction for an upcoming "Run on the bank" - when everyone wants their cash out I am pretty sure that there will not be enough.

tatertots12342• 4 years ago

“Not your keys not your coins” is a mantra in crypto for a reason. If you deposit your tokens into an unregulated and unaudited bank promising above market returns from their opaque strategy, there is a high likelihood you’ll eventually run into trouble.

Obvious solution is to encourage more regulatory framework around companies that claim to be custodial banks and investments. More audits, stable backings, and all of that.

tarsinge• 4 years ago

While I agree with the first part I don't see what it would change for the second: what is happening with Celsius is a good old bank run, and they have only like 10% liquid reserves. How long would it take to a well regulated bank be able to make all their assets under management liquid?

tatertots12342• 4 years ago

Regulated banks tend to have protections in place that avoid the possibility of users losing their funds.

marban• 4 years ago

I assume most Celsius holders didn’t watch the tutorial.

https://www.youtube.com/watch?v=3hG4X5iTK8M

jpmoral• 4 years ago

From their ToS

Celsius does not make any representation as to the likely treatment of Digital Assets in your Celsius Account, including those in a Custody Wallet, in the event that you, Celsius or any Third Party Custodian becomes subject to an insolvency proceeding whether in the U.S. or in any other jurisdiction. You explicitly understand and acknowledge that the treatment of Digital Assets in the event of such an insolvency proceeding is unsettled, not guaranteed, and may result in a number of outcomes that are impossible to predict reliably, including but not limited to you being treated as an unsecured creditor and/or the total loss of any and all Digital Assets reflected in your Celsius Account, including those in a Custody Wallet.

I don't understand why anyone would put money in.

floppiplopp• 4 years ago

Can't be long now until cryptobros propose some sort of crpto federal reserve to save their scam, i mean, stabilize the currency.

apienx• 4 years ago

It looks like Celsius is illiquid (not insolvent). Yes, they still offer 16.8% yield on SNX (a high-inflation one) if you earn in CEL token but demand for SNX yield on Celsius is so low that I don't see a problem with any of that. They acquired the leading custodial service (GK8) some time ago so funds are safu IMO.

Their current illiquidity crisis is due to them having to loan/stake coins to generate yield. Celsius also doesn't have lockdown periods which makes risk management very tricky. Plus, they have zero-fee trading.

I can see Celsius becoming _the_ one-stop shop for novices once they release the card and on/off-ramp services.

This is not an ideal situation, but is perfectly acceptable when you consider where the yield comes from.

Crypto Platform Celsius Pauses Withdrawals

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