Oh hey look the consequences of a monetary system that isn't backed by a legal system (that is backed up by people with guns).<p>The reason fiat money works is because at the end of the day if you run into trouble you have the legal system to make things right. And if the perpetrator of the crime doesn't listen to the legal system, there are people with guns/violence to back that up. That's why the whole system works -- because of the threat of violence.<p>Crypto doesn't have that. It has a lot of advantages (I use crypto myself) but it also has a big disadvantage, for now.<p>When the USA starts issuing it's own crypto they might solve this problem by requiring KYC to get the coins, but then of course you loose the anonymity aspect.
People surprised by this might be the sort of people who try to cuddle a porcupine and are surprised when they get stabbed. That said, we have laws designed to protect stupid people from those who prey on the stupid, so I hope these execs get the book thrown at them.
There's an update at the bottom of the article disputing the claim:<p>"Your report that Mr. Goldstein withdrew millions of dollars in advance of the “pause” is flatly mistaken. The reality is that Mr. Goldstein did not withdraw even one dollar in the four weeks prior to the pause—to the contrary, he deposited over $90,000 in CEL tokens in late May, just three weeks before the pause. Most of the supposed “withdrawals” from our client’s account were, in fact, regular-course transfers between his accounts and involved corresponding deposits. Indeed, in the year before the pause, Mr. Goldstein had net positive deposits into Celsius (including interest), not withdrawals. Your account unfortunately distorts Mr. Goldstein’s position, as he currently has millions locked up in Celsius, making him one of the Company’s largest unsecured creditors. Nuke is proud of his work to create a secure platform for Celsius users, and has been working tirelessly day in and day out to help restructure the Company to the benefit of all its creditors."
This was an incredibly bold operation from the begining.
They planned to exit one way or another, using the incorporated in the US to gain trust and the plan was not to just disappear, but file for bankruptcy as in "it happens".<p>It is remarkable how they used the depositors or investors money to pay for their lawyers and yet the government considers this a chapter 11 instead of 7, as if there is any way to conduct business going forward.
Reputation gone, money gone, the owners gone.<p>Every time something like this happens, on such a scale, makes you wonder, how can so many people fall for this?<p>I am not sure greed is the only factor, there must be more behind it, some shrinks will have a field day.<p>And all the victims are now asking for a government intervention.<p>There is no free lunch, even mashinkis money will come at a large cost. From what I read, many lost over 100k and some lost 7 digits, certainly some shady people amongst these.<p>In conclusion, this was planned from the very beginning. If they could run this profitable, fine, if not, they hiding money followed by chapter 11 was the backup plan.
I don't follow crypto, so these are actual questions, not trolling:<p>- If Celsius is a trading platform, how can Celsius itself owe anybody anything?<p>- My naive understanding is that cryptocurrency, being based on blockchain, is a log of universally agreed upon, legitimate transactions. So how can there be a liquidity crisis at all, let alone one in the billions? How is the platform allowing transactions not backed by actual funds?
Yeah, decentralization is the cornerstone of crypto. The reality of it all is that it is not. But don't tell that to the zealots.<p>I'm pro-crypto, I think the innovation and paradigm are brilliant - I am developing a small project in crypto. I don't fool myself into believing the hype that exceeds it's capabilities, project organization or true architecture at hand.<p>Cheers
These are the same people that are selling 'unbankrupt yourself' t-shirts after going bankrupt.<p>See this (entertaining) video :) <a href="https://www.youtube.com/watch?v=rTwzM0_PjPw" rel="nofollow">https://www.youtube.com/watch?v=rTwzM0_PjPw</a>
It's one thing to pull some elaborate and complex fraud, but you'd have to be really stupid to do such blatant insider trading in broad daylight. Are they taking calculated risks in doing this because surely they're getting prosecuted and having all their money taken away as well?
Here is an article about Federal reserve officials selling all their stocks dated September 10th 2021 to avoid "conflict of interest". I would ask you to open the S&P 500 and check the 10th of September 2021.
<a href="https://www.reuters.com/business/finance/fed-officials-sell-stocks-avoid-apparent-conflict-interest-2021-09-09/" rel="nofollow">https://www.reuters.com/business/finance/fed-officials-sell-...</a><p>It's not just about crypto, it's about <i>who</i> is allowed to use inside information.<p>Celsius was a scam, if something seems too good to be true then it is. The same applies to LUNA and it's Anchor protocol which was giving 20% APY on the UST stablecoin. We saw what happened there.
I suspect "Celsius execs" are about to get a tour of US bankruptcy law's clawbacks policy.<p>Anyone who withdrew money from Celsius in the 90 days leading up to the bankruptcy can be ordered by the judge to put it back in, and that timeline is extended to 1 year for insiders. [1]<p>A bunch of the folks who thought they got out of Madoff's fund learned that lesson last time.<p>[1] <a href="https://www.lowenstein.com/media/3095/beware-of-bankruptcy-clawback-suits.pdf" rel="nofollow">https://www.lowenstein.com/media/3095/beware-of-bankruptcy-c...</a>