Tensions are boiling over at Celsius Network, a crypto lending platform that saw many customers lose money in recent crashes.
It may come as no surprise that Hoboken, New Jersey-based Celsius Network LLC is one of the largest crypto lending firms in this world. According to its website, the company has more than $11 billion worth of assets.
According to the company, Hoboken, New Jersey-based Celsius Network LLC is one of the largest crypto-lending firms in the world, holding over $11 billion worth of assets. Celsius is a cryptocurrency firm that offers extremely high-interest rates to investors.
They also provide loans at low rates with crypto as collateral, making them an integral part of the growing ecosystem of firms taking crypto deposits and paying their customers impressive yields!
The heat seems to have been turned up when Bitcoin fell below $30,000 and the entire market saw drawdowns.
Journalist Jacob Silverman recently commented on Twitter that in just over a day, Celsius assets under management have experienced $5 billion worth of losses.
Things sound bad at crypto bank/lender Celsius. AUM down $5 billion in less than two weeks. Customers revolting. The CEO is cashing out and yelling at people in AMAs. Insane yields were always unsustainable. https://t.co/a6XzPgIvNI pic.twitter.com/EMuPjK7DNK
— Jacob Silverman (@SilvermanJacob) May 18, 2022
The CEL token has been steadily declining for the past several days, with no sign of recovery in sight. It’s down 3% over 24 hours, more than 20% over the past week, and 63% since two weeks ago! It is currently trading at $0 .799.
The company raised $400 million in October 2021, but users reported that trading was illiquid as the token price started falling. This led to more investors losing money and caused a panic among some traders who wanted out before their investment went south too!
The CEO engaged in a Twitter chat with investors, answering questions about the company’s future plans. The unfiltered conversations taking place on Twitter Spaces allowed for an open discussion between stakeholders and management.
The company Celsius recently announced that their Bitcoin mining subsidiary might be going live and that they have filed confidentially with the SEC on May 16. It was believed that this could provide a cushion for when things get tough and help make sure profitability remains high.
All seems not to be well with the high yield business. Investors are starting to get nervous as the yield on Celsius mortgages unravels and more red flags come up.
Celsius a New ‘Crypto Bank’
Celsius is one of the new cohorts emerging in cryptocurrency banking, which offers high yields to investors who hold onto their coins.
The company offers a high-interest loan service where investors can borrow either fiat or cryptocurrency at competitive rates and repay them in either fiat or cryptocurrency. This innovative ‘crypto bank’ has its own native token called CEL that can be used to facilitate transactions and provide returns for investors.