What is Celsius? Crypto Lender Freezes Withdrawal, Says Things Will Take Time
Decentralized finance (DeFi) has been a huge help for crypto traders and investors in building up their portfolio. DeFi are different types of financial services from staking, crypto savings accounts and crypto lending platforms.
One of the known platforms available in Web 3.0 is Celsius Network, which, while not really a DeFi platform, still offers products similar to DeFi apps.
Disclaimer: This is not financial advice. The objective of the article is to inform about Celsius Network and its background. Hence, practice due diligence in researching on the topic and cryptocurrencies before investing in it.
What is Celsius?
Celsius Network LLC is a centralized marketplace platform providing access to curated financial services to its members. It specializes in consumer lending, fintech and financial services.
What does Celsius do?
Users of Celsius are able to deposit cryptocurrency digital assets, which include Bitcoin (BTC) and Ether (ETH), into a Celsius wallet to earn a percentage yield or take out loans by placing their cryptocurrencies as security. As of May 2022, it had lent out $8 billion to clients and almost $12 billion in assets.
When did Celsius started?
Celcius was founded by Alex Mashinsky (CEO), S. Daniel Leon (CSO) and Nuke Goldstein (President of Labs) in 2017. Celcius manages its operations from the US and UK. In December 2021, Celsius has expanded its office in Israel, having 100 employees to work for the company and eventually expanded its operations globally.
Investors and Key People of Celsius
Caisse de dépôt et placement du Québec, a Canadian pension fund, WestCap Group, a growth-equity firm founded by technology investor Laurence Tosi, former CFO of Airbnb Inc., Governing Dynamics, a venture capital firm focused on pioneering technology-based in Tennessee and ValueNet Capital, a venture fund focused on investing in blockchain technology companies, are some of the twelve investors of Celsius.
After the crash of Terra and Luna and the continuous downtrend of Bitcoin, Celsius decided to suspend all withdrawals from its platform last June 13 “for the good of the community.” This has caused many investors to panic on the status of their investments within the platform and anxious on when Celsius will go back to being fully operational.
After an hour of the announcement, the price of cryptocurrency Celsius (CEL), reportedly dropped to 70% which gave more uncertainty to the community.
In response to the reaction of their patrons, Celsius’ CEO, Mashinsky broke his silence after 3 days to reassure the community.
Celsius released their FAQs, as well, to inform their members of the current situation and answer the possible questions they may ask. As of their memo, the reason their was a pause in the withdrawal was to stabilize their liquidity and operations while they take steps to protect their customer assets.
Meanwhile, Texas has reportedly initiated an investigation on the lending platform. This action may cause more pain to Celsius as the government looks into the matter.
Celsius has been a a popular lending platform. For years it has been in operation, but it only now encountered a huge hit because of the bear market and had to resort to suspending the withdrawal of assets to protect the liquidity of the platform and its community.
It is a good practice to observe the market movement and thoroughly read through the terms and conditions of any crypto platforms before investing in them. Knowing the clauses, can prevent investors from any possible loss in their assets and to protect one’s self from any form of abuse.
This article is published on BitPinas: What is Celsius? Crypto Lender Freezes Withdrawal, Says Things Will Take Time
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.