{"id":463723,"date":"2022-06-15T16:30:37","date_gmt":"2022-06-15T13:30:37","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/what-happened-to-celsius-the-crypto-lender\/"},"modified":"2022-06-15T16:30:37","modified_gmt":"2022-06-15T13:30:37","slug":"what-happened-to-celsius-the-crypto-lender","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/what-happened-to-celsius-the-crypto-lender\/","title":{"rendered":"#What Happened to Celsius, the Crypto Lender?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_89 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6aee20108c5a8\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6aee20108c5a8\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/what-happened-to-celsius-the-crypto-lender\/#%E2%80%9CWhat_Happened_to_Celsius_the_Crypto_Lender%E2%80%9D\" >&#8220;What Happened to Celsius, the Crypto Lender?&#8221;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/what-happened-to-celsius-the-crypto-lender\/#What_Is_Celsius\" >What Is Celsius?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/what-happened-to-celsius-the-crypto-lender\/#Why_the_Announcement_Matters\" >Why the Announcement Matters<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/what-happened-to-celsius-the-crypto-lender\/#Those_High_Interest_Rates_Came_With_a_Risk\" >Those High Interest Rates Came With a Risk<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CWhat_Happened_to_Celsius_the_Crypto_Lender%E2%80%9D\"><\/span>&#8220;What Happened to Celsius, the Crypto Lender?&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div>\n<figure style=\"width: 1200px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"type:primaryImage wp-image-811696 size-full\" data-pagespeed-no-defer=\"\" src=\"https:\/\/www.howtogeek.com\/wp-content\/uploads\/2022\/06\/shutterstock_2119075655.jpg?width=1198&amp;trim=1,1&amp;bg-color=000&amp;pad=1,1\" alt=\"\" width=\"1200\" height=\"675\" data-crediturl=\"https:\/\/www.shutterstock.com\/image-illustration\/3d-rendering-cryptocurrency-celsius-coin-on-2119075655\" data-credittext=\"ARTEMENKO VALENTYN\/Shutterstock.com\"\/><figcaption class=\"wp-caption-text\"><span class=\"type:primaryImage imagecredit\"><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.shutterstock.com\/image-illustration\/3d-rendering-cryptocurrency-celsius-coin-on-2119075655\">ARTEMENKO VALENTYN\/Shutterstock.com<\/a><\/span><\/figcaption><\/figure>\n<p>The crypto market has been rattled again in June 2022 due to a groundbreaking announcement made by crypto platform <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/celsius.network\/\">Celsius<\/a>. The company announced it would no longer allow users to withdraw, swap, or transfer account balances.<\/p>\n<h2 role=\"heading\" aria-level=\"2\"><span class=\"ez-toc-section\" id=\"What_Is_Celsius\"><\/span>What Is Celsius?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Celsius is a centralized lending and borrowing platform that\u2019s been around\u00a0since 2017.\u00a0 Users can deposit crypto assets on the Celsius platform to earn generous interest rates, or they can use them as collateral for loans.<\/p>\n<p>Users can also buy Celsius\u2019s native CEL token which gives them access to greater promised rates of interest and better borrowing rates.<\/p>\n<p>Celsius is similar to other centralized platforms like <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/redirect.viglink.com\/?key=204a528a336ede4177fff0d84a044482&amp;u=https%3A%2F%2Fblockfi.com%2F\">BlockFi<\/a> and <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/redirect.viglink.com\/?key=204a528a336ede4177fff0d84a044482&amp;u=https%3A%2F%2Fnexo.io%2F\">Nexo<\/a> that allow users to earn interest on their crypto holdings. These companies act similarly to banks. They use the deposited crypto to generate profits.<\/p>\n<p>Celsius takes user deposits and loans them out to other institutions, crypto exchanges, and DeFi\u00a0 protocols at a higher interest rate than what it offers its users and keeps the difference.<\/p>\n<p><strong>RELATED:<\/strong> <strong><em>What Is DeFi? The Basics of Decentralized Finance<\/em><\/strong><\/p>\n<h2 role=\"heading\" aria-level=\"2\"><span class=\"ez-toc-section\" id=\"Why_the_Announcement_Matters\"><\/span>Why the Announcement Matters<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In a May 2022 report, Celsius disclosed it had roughly <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.ft.com\/content\/61334d19-fb25-4492-83d0-78c3cfec4df8\">$12 billion<\/a> worth of assets under management and had nearly 1.7 million customers. That number has likely plummeted due to the sell-off that has swept through the entire crypto sector in mid-2022.<\/p>\n<p>In short, Celsius is facing a liquidity crisis. The company has evaluated its assets and has come to the realization that, if every customer were to withdraw their balances, they would not have enough liquidity to reimburse them.<\/p>\n<p>According to the announcement on Celsius\u2019s website, the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/blog.celsius.network\/a-memo-to-the-celsius-community-59532a06ecc6\">decision<\/a> to halt withdrawals was made in an effort to reposition Celsius so that it could honor future withdrawal requests and navigate these tumultuous market conditions.<\/p>\n<p>Subsequently, this announcement has triggered a small-scale <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/redirect.viglink.com\/?key=204a528a336ede4177fff0d84a044482&amp;u=https%3A%2F%2Ffortune.com%2F2022%2F06%2F14%2Fcelsius-meltdown-bank-run-crypto-crash-regulation-finance-gene-grant%2F\">bank run<\/a> across the market and amongst other competitors of Celsius. Bank runs occur when depositors withdraw their money en masse due to fears that the institution will become insolvent.<\/p>\n<h2 role=\"heading\" aria-level=\"2\"><span class=\"ez-toc-section\" id=\"Those_High_Interest_Rates_Came_With_a_Risk\"><\/span>Those High Interest Rates Came With a Risk<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>It is worth mentioning that these centralized platforms like Celsius, BlockFi, and Nexo are not insured by the government. While the interest rates these companies offer are enticing, they are not without risk. Users should never allocate all of their holdings on these platforms.<\/p>\n<p>As Celsius is proving, they are not as safe as they are made to seem.<\/p>\n<p>Cryptocurrency investors should opt for holding their balances on their own wallets (digital or hardware) and get them off of exchanges and platforms for maximum protection. This doesn\u2019t protect from declining prices, but it does protect investors from avoiding a situation like Celsius customers are currently in.<\/p>\n<\/div>\n<p><script>\n setTimeout(function(){\n  !function(f,b,e,v,n,t,s)\n  {if(f.fbq)return;n=f.fbq=function(){n.callMethod?\n  n.callMethod.apply(n,arguments):n.queue.push(arguments)};\n  if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0';\n  n.queue=[];t=b.createElement(e);t.async=!0;\n  t.src=v;s=b.getElementsByTagName(e)[0];\n  s.parentNode.insertBefore(t,s) } (window, document,'script',\n  'https:\/\/connect.facebook.net\/en_US\/fbevents.js');\n   fbq('init', '335401813750447');\n   fbq('track', 'PageView');\n  },3000);\n<\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more like this article, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/technology\/\" target=\"_blank\" rel=\"noopener\">Technology category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/www.howtogeek.com\/811412\/what-happened-to-celsius-the-crypto-lender\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;What Happened to Celsius, the Crypto Lender?&#8221; ARTEMENKO VALENTYN\/Shutterstock.com The crypto market has been rattled again in June 2022 due to a groundbreaking announcement made by crypto platform Celsius. The company announced it would no longer allow users to withdraw, swap, or transfer account balances. What Is Celsius? Celsius is a centralized lending and borrowing&#8230;<\/p>\n","protected":false},"author":1,"featured_media":463724,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/www.howtogeek.com\/wp-content\/uploads\/2022\/06\/shutterstock_2119075655.jpg?height=200p&trim=2,2,2,2","fifu_image_alt":"","footnotes":""},"categories":[18],"tags":[],"class_list":["post-463723","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/463723","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=463723"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/463723\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/463724"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=463723"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=463723"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=463723"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}