The highlight of the crypto lender
Interest income platform Celsius Network has frozen withdrawals after deploying a variety of failed decentralized finance (DeFi) strategies.
It suffered a string of heavy losses, including more than 38,000 ETH in a Stakehound-related bug, followed by a $22 million loss related to the Badger DAO hack.
Customers now fear they will never be able to access their funds locked at Celsius again.
The cryptocurrency market, already hurt by LUNA's collapse last month, lost $180 billion in market cap on the announcement of Celsius, and major exchanges have already announced a number of job cuts.
Celsius crypto lenders
DeFi Disasters
In June 2021, Ethereum operations service Stakehound announced that it had “misplaced” private keys for over 38,000 ETH. On-chain data provided by Nansen suggests that Celsius has lost at least 35,000 ETH as a result and is left with the now worthless Stakehound ETH tokens.
Celsius did not notify its customers of this loss; instead, CEO Mashinsky was seen in a livestream shortly afterward holding a skateboard with the words "hodl," a well-known crypto slang meaning "don't panic sell."
Mashinsky said verbatim
The way to becoming a millionaire or becoming a whale is to hodle.
The future of Celsius and its investors remains uncertain. While the company has remained relatively quiet on social media, data on the trading chain shows that it is actively juggling funds and credit with market makers and DeFi protocols to ensure it is not liquidated with leveraged positions. On Thursday, Texas and four other US states announced investigations into Celsius' move to freeze withdrawals were underway.
In recent weeks, the company has upgraded its risk disclosures amid regulatory uncertainty. Also, it has restricted access to its Earn product to accredited investors.
In the official update detailing the reasons behind the cessation of activity on the platform, Celsius said the move was necessary to ensure the company can meet its payout obligations.
Here it says : Our number one goal is to stabilize liquidity and restore withdrawals, transfers and swaps (crypto-to-crypto trades) between accounts as quickly as possible. There is still a lot of work to do as we consider different options and this process will take some time.
One thing is certain: the crime story about Celsius will continue to be exciting.
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