- Celsius, the largest cryptocurrency lending platform, froze withdrawals on Sunday
- According to Insider, customers say their money is worth between $2,300 and $105,000. are trapped in the application
- This crisis reveals a key flaw in a decentralized financial system where customers do not enjoy the same protection as traditional accounts
- Other such analyzes can be found on the main page of Onet.pl
Angry customers with $2,300 to $105,000 in cryptocurrencies. They complain that their funds will be trapped in the Celsius network until the lockdown is lifted. But no one told them when that would happen, they tell Insider.
Celsius user frustration shows how decentralized finance traffic, despite its promises to empower individual customers, he leaves the holders cryptocurrencies without protection provided by traditional accounts.
Nobody knows where the money is
Celsius accepts customer deposits in cryptocurrency in exchange for high returns by lending tokens to other businesses and individuals. As of May, the five-year-old platform managed assets worth $11.8 billion, with a base of 1.7 million customers.
However, as the entire cryptocurrency market faced a brutal bear market, the number of users plummeted.. To stabilize the situation, Celsius stopped allowing customers to withdraw funds on Sunday. Customers say there is now a message instead of the withdraw button saying it has been suspended.
Raphael Miller, the software developer, told Insider that since Tuesday he also had almost 1 bitcoin (equivalent to about $2,300) frozen in degrees Celsius.
“I have accepted the fact that I will not be able to withdraw anything in the near future,” he said.
In a statement on Sunday, Celsius said it was working to restore payments “as soon as possible”, but did not give specific dates.
Jake Greenbaum, another user of the platform, remains in the same situation. Known online as the “king of cryptocurrencies”, he told Insider that he froze Solan’s funds worth $105,000.
Greenbaum says he “felt something was happening” and managed to withdraw his entire $250,000 stake. in the air (Ethereum cryptocurrency) five days before Sunday’s news. He also attempted to withdraw funds from Solana 12 hours before Celsius stopped withdrawals, but to no avail.
– They knew they were withholding payments before making an announcement and had frozen them earlier. They fucked me over 5000. Solany. And their motto was “currency available at all times”, which was supposed to refer to their marketing slogan: “have access to your cryptos at all times”, comments Greenbaum ironically.
Timbre Cierpke, a musician and customer of Celsius, says she has been slowly accumulating bitcoins over the past five years and storing them on the platform.
‘If something doesn’t happen that causes me to reopen, I will lose the equivalent of my annual income,’ he comments to Insider, then clarifies that loss may be closer to two-year gains. “Little customers like me will be hit the hardest,” he adds.
The clock is ticking for Celsius
Celsius said it froze payments to “stabilize liquidity”. This means that the deposits accumulated on the platform were not equal to the number of assets it held in the blockchain. Miller said that will not use the company’s services until the crisis is resolved.
– In the end, the low liquidity is due to poor investment decisions. So if they don’t take a more conservative approach, I won’t want to reinvest my money with them, he explained.
Meanwhile, other customers worry about it the company may have an insolvency problem or will be forced to file for bankruptcy.
If the situation does not normalize, Celsius must take into account the rage of users in both cases.
– The clock is ticking for Celsius. The longer there is no “remove” button, the greater the likelihood that all customers will leave, Miller comments.
Author: Katie Canales
Translation: Dorota Salus