Celsius, one of the market’s leading centralized cryptocurrency lending networks, faces pressure from market players hit massively by the latest crash.
Reports indicate the Celsius lending network might be in turmoil. Some clients complain about being unfairly wiped from the space, whereas company executive Alex Mashinsky revealed that malevolent actors attempted to destroy the system.
Celsius is among the leading lenders in the cryptocurrency industry, with assets worth approximately $11.8 billion. The company loans cryptocurrencies that users deposit while providing high yields as interests. Also, the lending platform allows individuals to take low-interest loans with digital coins as collateral.
This model is lucrative amid buoyant markets and high demand. However, the overall systems weaken when prices fall sharply, as they did this month. Max Keiser, a BTC bull, compared Celsius’s high yields to those previously provided by DeFi networks harnessing LUNA and UST.
Celsius Next after Terra?
18 May report (by Barron) stated that the company received pressure on two aspects. Watchdogs claim the firm operates outside the regulation, and the market-wide crash saw panicked investors withdrawing funds. One former client tweeted about cashing out all funds as CEL token implode means a massive warning signal. He added that Celsius’s $50 bonus for a $2,500 stables deposit is a warning sign. The client stated that capital preservation is more important than capital returns.
Customers on Twitter confirmed selling their CEL coins, asking Mashinsky about the company’s move to support investors. Customers also complained about illiquid trade as the alt price dipped, exacerbating their losses while the firm could not back the native coin.
However, Mashinsky noted that outside troublemakers attacked the company. The report stated that he argued with investors threatening to quit the firm, saying he also lost millions of dollars amid the market crash. Moreover, the company raised $400M in October 2021’s funding rounds, which adds salt to investors’ wounds.
CEL Price Plummets
The network’s native coin, utilized as lending collateral, lost another 2.4% today, trading near $0.815, according to data from CoinGecko. Furthermore, CEL lost over 20% within the previous week and a staggering 63% over the past 14 days amid intensifying fear and accelerated sell-offs. For now, CEL hovers 90% down from the June 2021 ATH of above $8.