I had been warning about Celsius for months, in fact I even published this blog post last year: <a href="https://rorodi.substack.com/p/the-biggest-crypto-lending-company" rel="nofollow">https://rorodi.substack.com/p/the-biggest-crypto-lending-com...</a><p>Also posted it here on HN but it did not get much traction.
What really baffles me is that major VCs have put hundreds of millions into what pretty much every one who has watched one or two episodes of "American Greed", would immediately recognise as being a ponzi scheme.<p>I e-mailed the regulators, the VCs etc... They did nothing, and now it is too late.
Reddit thread warning about this 2 weeks ago. Not everyone agreed.<p><a href="https://old.reddit.com/r/CryptoCurrency/comments/v29t59/celsius_is_insolvent_please_get_your_funds_out_now/" rel="nofollow">https://old.reddit.com/r/CryptoCurrency/comments/v29t59/cels...</a>
My favorite part of this is that because their reserves are illiquid, Celsius is forced to take out loans from other exchanges in order to pay out withdrawals. Each of these transactions/bailouts was visible on the blockchain and immediately called out on Twitter, accelerating withdrawals. A run on the exchange.<p>If one major exchange goes bust and people learn that they have no recourse to recover funds, expect to see people pulling money out of other exchanges.
They're done. Even if they're not insolvent, the moment they enable withdrawals, everyone will cash out.<p>There's no new money entering this space anyway. Without customer deposits, they're toast as a business.
One of the “largest crypto gateways”, of which most people have never heard before, has almost 1B in VC funding, custodied only 3x that and somehow made themselves insolvent. Why am I not surprised?
Oh boy oh boy that thread had lots of ETH and sETH and oETH und BTC and what not.<p>No wonder that it's hard for some people to see the Ponzi schemes, pyramid schemes and what else those things are called.<p>Regulations anyone?<p>Or do we now just see people loosing their money?
Who said doublespent is impossible? Innovating your way out of such a limitation :<p>"$stETH is a product by @LidoFinance.<p>It stands for (liquid) staked $ETH and it's one of the most innovative DeFi products to be released in the last few years.<p>$stETH can also be used to earn MORE yield than otherwise possible with vanilla $ETH.<p>Why?<p>Because while $stETH already earns staking yield, it can also be lent out or liquidity provisioned."
Does anyone have any inkling about Voyager? I only ask because when I was looking into it last year, seemed everyone said 'use Celsius or Voyager', so I assume they are somewhat similar. I used Voyager to get 9% APY on USDC just to test it, but chickened out and withdrew it all because I basically envisioned something like this happening.
Latest Coffeezilla video's about it recaps it very nicely: <a href="https://www.youtube.com/watch?v=d5ll3ByaoHE" rel="nofollow">https://www.youtube.com/watch?v=d5ll3ByaoHE</a>
They were assuring customers of their stability, let’s see, six days ago: <a href="https://blog.celsius.network/damn-the-torpedoes-full-speed-ahead-4123847832af" rel="nofollow">https://blog.celsius.network/damn-the-torpedoes-full-speed-a...</a><p>Surely there are going to be criminal charges forthcoming. Doing everything they can to prevent people withdrawing up to and including blatantly lying.<p>If history is any guide this isn’t close to over yet.
Regarding the investment part (not the marketing or insurances obv.) how is that different from what an investment bank does when it invest in long term products? If the funds are in e.g. long term bonds, real estate, mortgages... the investors can't get back all of their money all at once, it will take years to mature, also the capital they are required to hold are only a few percent, so they are also technically insolvent right? Genuinely asking.