Celsius hits the pause button on customer transactions
Crypto lending firm Celsius Network will halt inter-account withdrawals and transfers, citing “extreme market conditions" as the driving factor.
Celsius—one of the largest lenders in crypto—claimed that it had ~$11.7 billion in assets under management (“AUM”) and 1.7 million users as of May 17th, with an estimated $8B made in loans.
Republic Crypto’s Director, Graham Friedman, and Co-Founder and Head of Advisory, Bryan Myint, weighed in on the reasoning behind Celsius’ freeze:
“Since Celsius’ model is based on actively trading user assets, the firm is having a hard time fulfilling customer transactions. So, they decided to freeze withdrawals, which is disconcerting because many investors are looking for liquidity right now. This was largely precipitated by their staking of users’ ETH, which has a two-year lockup, and prevents users from withdrawing their ETH.”
– Graham Friedman
“Markets are dying today, and it's most likely in response to Celsius, which is one of the largest places investors store their crypto. They did some risky lending and borrowing to generate yield. The market is going down, so obviously, their plays are not working out well. So they had to pause everything on the platform, which means users aren't able to withdraw.”
– Bryan Myint
Events like this are a good time to remember why blockchain technology was created in the first place—to allow users to make financial transactions without a centralized authority. Unfortunately, many investors take comfort in the “security” of centralized custodians like Celsius and Coinbase. The familiarity of traditional finance’s structure is sometimes too hard to eschew.
The unfortunate irony here is that, although Celsius and Coinbase make the process of storing your crypto easier, the downside is that you don't have full control of your keys and your assets are at the mercy of the custodian that holds them.
Consensus 2022 attracts over 17k crypto enthusiasts
Consensus 2022 took place in Austin last week. It’s a festival showcasing and celebrating “all that crypto has to offer,” from NFTs to DeFi to web3 and beyond—and how they affect business, culture, and communities.
“Consensus in Austin was bumping; it was packed. There was a lot of institutional capital very attracted to Bitcoin. So, even though we're going into a recessionary market, there are still a lot of major players with their eyes on the space. I would say institutional partners have departments; they may be small, they may be one person, but they have full-time staffing dedicated to this.”
–Graham Friedman
ICYMI
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Things to remember before you invest in ANY digital asset project with Republic:
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Check out this article for tips to help keep your digital assets safe.
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