In recent few days, Crypto lending has been a nightmare for investors as many lending companies like Celsius have now disabled the withdrawal of the funds. Alex Mashinsky (Celcius CEO) made a platform to offer a safe place for crypto investors to make investments. But it turned out to be an unsafe application.
A lot of investors have deposited their funds which they are now unable to withdraw. Due to a sudden fall in the crypto market and bitcoin losing 60 percent of its value from November 2021, the Company couldn’t pay the loans it took.
Celsius Network Crash: Customers Are Left Without Funds
As per the different publicly available reports for the community members, it had reported that Celsius owe approximately USD 4.7 Billion. However, there is no confirmed number by the company.
Many clients have written letters to an online court about how they lost their savings when withdrawals are disabled. Few letters quoted that celsius claimed that they are much safer from the bank, whereas few letters quoted that they felt depressed, angry, ashamed, and betrayed.
Statistics About Celsius
- Celsius owns approximately USD 4.7 Billion.
- Celsius’s total valuation was 3 Billion after they raised USD 690 Million in series B.
- Celsius’s assets value has fallen by approximately 17 billion US Dollars to 4 Billion from 22 Billion USD.
Celsius disabling the withdrawal was not a good action as it has generated quite a few problems and made realize that the customers can not get the money back due to the agreement they signed. According to the agreement, All the funds deposited were the celsius property but not the investors.
Celsius Bankruptcy filing
Crypto Lender had revealed that they had lost over 1.2 Billion USD while filling a bankruptcy case. CEO Alex Mashinksy has realized its mistake and considers it poor investments and different unanticipated losses.
Celsius disclosed as it sought US bankruptcy protection after freezing consumer payments. Their overall liability is USD 5.5 billion, while their assets are USD 4.3 billion.
The major chunk of the liability is to the Celsius Users. While they failed, they stated they could face huge losses due to the company’s problems and disastrous market bets.
Recent bitcoin bankruptcy shows how a lack of rules can harm consumer rights and protections.
Customers should invest carefully and understand the terms of service before transferring their savings.
Most platforms offering high Returns on Investments are often prone to risks. Bitcoin was launched to ensure the self-custody of the funds, which means they act like their own bank without any returns.
Celsius was one of the platforms that had pulled billions of investments from retail investors and promised a return of approximately 18 percent on different cryptocurrencies.