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Crypto Platform Celsius Pauses Withdrawals
- NoblePublius 4y ago
- mdorazio 4y agoAs someone with a decent amount of money in Celsius, this hurts. Not money I need, but still.
- headsoup 4y agoDefinitely not a ponzi scam in the exit stages. Definitely.
- jonathan-adly 4y agoEvery bear markets brings down a bitconnect. if you get into crypto, at the very least - understand not your keys, not your coins!
- quickthrower2 4y agoCryptocurrency is like the horses. Only for money you can afford to lose. That is all crytpo from Bitcoin to shitcoins with names ending in "Ibu". It is gambling. I have a bit of a flutter on it. It is worse than stocks as there is no productive value (actually it is the opposite, it costs a fortune to keep the networks running.)
- gadnuk 4y agoSeems like a ponzi scheme in crypto collapses almost every other week these days. It was LUNA in May Celsius now Probably USDD soon A lot of these "fake internet money" coins have no use cases other than trading with the next sucker willing to buy on crypto platforms And then you have platforms like Coinbase facilitating trading of such "assets" or tokens with little to no due diligence A lot of these: Failed as a currency Failed as an inflation hedge Failed as a store of value Crypto bros will try to do whatever mental gymnastics they can to justify their investment, probably because they are all in. But I can't wait for most of these coins to implode for good as they serve no use to society. Comparable to cigarettes (zero health benefits) than wine (harmful in large amounts, has health benefits in moderation). If someone is offering you a yield of more than 18% APY, then you are the yield to the next guy!
- JumpCrisscross 4y agoThere seems to be a surplus of capital in our economy. Macroeconomically speaking, crypto is private actors taking the fall for us all.
- TrapLord_Rhodo 4y ago'Taking the fall"? BTC is still up an incredible amount over the last 5 years. More like created a new tech elite while shaking out the free-loaders every cycle.
- headsoup 4y agoWhat is 'tech elite' here?
- wmf 4y agoA fancy term for rich people who think they got rich because they're so smart.
- CryptoPunk 4y ago
- rvz 4y agoThis is how a rug pull starts and why 'staking' on someone else's platform is a scam. Once they are able to pause withdrawals then you are too late. Not all of these projects will survive the cryptocurrency crash. We only saw many silly DeFi projects popping everywhere when the market goes up, but I'm very certain that many of them (not all of them) will shut down when the down side comes back. In general, it looks like the cryptocurrency mania is finally dying again, as expected. [0] Now we will see how long Tether has left before causing more chaos to the cryptocurrency market. [0] https://news.ycombinator.com/item?id=29444596 https://news.ycombinator.com/item?id=29444596
- tempsy 4y agoYeah this is going to be much worse than Luna. Buckle up.
- graeme 4y agoThis is all one big crash stemming from the Luna crash. Celsius had invested in Luna, lost some there and lost investors as well in the run for the exits. One of Celsius’ shareholders and creditors is the stablecoin Tether. This broke its peg when Luna crashed, saw billions in outflows and never regained the peg. Been around 0.9990 for a month give or take when it used to hover a bit above 1.00 Luna crash hit a bunch of balance sheets, now Celsius has to recognize losses and fold. Question is who is next to fold? Probably Nexo, a Celsius clone. And Tether itself will be under immense strain.
- charcircuit 4y agoTether didn't depeg. Since there is a 0.1% fee when redeeming Tether redeeming Tether can only bring up the price to $0.999. You need demand for Tether to increase to bring it up to $1.
- gammarator 4y agohttps://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/ claims it hit a low of $0.97.
- deleted 4y ago[deleted]
- arcticbull 4y agoIt was lower than that. If you click on the Historical Data tab, you'll see they report a low of $0.9485 for May 12. However, it may well have dropped even further depending on the exchange. These aggregators aren't a reliable source generally speaking.
- TrapLord_Rhodo 4y agoTether totally depegged. During the Luna collapse, it got down to .87 in 4 pool and a couple other DEX's. Technically, There is no 'Peg', it only exists because of arbitrage.
- gammarator 4y agoFive days ago: “Celsius continues to process withdrawals without delay.” https://blog.celsius.network/damn-the-torpedoes-full-speed-ahead-4123847832af https://blog.celsius.network/damn-the-torpedoes-full-speed-a...
- erung88 4y agoIn retrospect, that blog post seems to be a good hint the withdrawals will be paused soon.
- tenpies 4y agoCrypto is so disruptive it just re-invented the bank run. For reference, if you ever see a bank say this, it's probably a good idea to get to an ATM post-haste and withdrawal as much as you possible can.
- jakelazaroff 4y agoYou probably still don’t have to worry: cash in a bank is insured up to $250k per ownership category by the FDIC. Even your (traditional) investments are protected against by the SIPC in case your broker goes out of business. If your crypto exchange goes away, you, of course, just lose everything.
- kasey_junk 4y agoIf your bank is having liquidity issues then it’s long past time to get your needed money out. FDIC insurance paybacks can take months or more to happen. But! The FDIC is not just insurance. It’s also a framework for risk management including liquidity risk. Banks have pretty detailed playbooks on how to manage liquidity risk that are routinely audited. It is therefore pretty rare for any US bank to have such issues and when they do it’s because they were cooking the books.
- kasey_junk 4y ago[Later] https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/ https://www.fdic.gov/resources/resolutions/bank-failures/fai... Reading through those I couldn’t actually find any banks that had evidence of liquidity issues. And the longest I saw for the fdic to get depositors access to their funds was the weekend. Most of them don’t even tap FDIC insurance they just hand the depositors over to a different bank.
- vishnugupta 4y agoThe inflation data was unexpectedly bad, despite the recent rate hike there’s no sign of the economy cooling down. So folks are expecting fed rates to get to as high as 5%. Naturally all other financial markets are adjusting sharply to this. In crypto, get-rich-quick schemes will be the first ones to fall. Fed folks changed their stance from “soft” landing to “softish”, meaning they are falling short of calling for recession. Next 18 months are going to get very bumpy.
- rvz 4y agoCertainly. The time to prepare for this was in November - December 2021. [0] When the market euphoria was going close to its peak of peaks. Look at the responses then in [0]: 'Stock market up 1% today' on a daily chart. When I said it already started months ago [1], some point to data about the Fed 'official' announcements of being in (and defining) a recession and even still boldly suggesting afterwards: 'We are most certainly not in a recession.' This is how the 99% think. The problem is as with many of the commenters at the time still failed to understand is, you never, never, NEVER wait for the news to come out to prepare then or look at 'daily charts'. You must prepare and expect for anything unexpected in the long term in advance, such as months or a year for events just like this. Uncertainty is frowned upon, especially when it is prolonged. [0] https://news.ycombinator.com/item?id=29508238 https://news.ycombinator.com/item?id=29508238 [1] https://news.ycombinator.com/item?id=31441710 https://news.ycombinator.com/item?id=31441710
- deleted 4y ago[deleted]
- joosters 4y agoWhen the market euphoria was going close to its peak of peaks You only know it was a peak after it peaks. So your advice just boils down to 'sell before the price goes down'. What an insight!
- piva00 4y agoIt definitely sounded like a "you just need to be right when timing the market!" advice.
- tehlike 4y ago
- 0xB31B1B 4y agoWhat is Celsius and why is is breaking down?
- glerk 4y agoCelsius is (was?) a centralized platform promising users high yields in exchange for them depositing crypto assets into a sort of savings account. Nobody really knew what Celsius was doing with those funds. It looks like the funds were invested in some risky ventures (such as the Anchor Protocol, which collapsed following the LUNA debacle), and Celsius is now insolvent.
- b0sk 4y agoWeb3 is going great!
- alismayilov 4y agoIs celsius.network similar to crypto.com? I see crypto.com advertisements at many big sport events, including F1, UFC, etc. I am wondering how is their business doing at this current market.
- a_square_peg 4y agoThe post-2017 rise of Bitcoin and printing of Tether seemed to have all started around mid-2020 with Fed's lowering of interest rate in response to Covid19. Now that the macroeconomic condition is changing to reign in the inflation, it seems to make sense that the money that flowed into these speculative narratives will flow out and we'll finally see who has been swimming naked...
- propter_hoc 4y agoThe irksome thing here for me, as a resident of Quebec, is that our provincial pension plan recently invested heavily in this project. That's a not insignificant amount of retiree money gambled irresponsibly and lost within months. Ironically, just as the pension plan announced its investment, the provincial securities regulator announced that they're investigating Celsius for violating securities laws. Just an embarrassment of a situation overall... Details here (in French): https://ici.radio-canada.ca/recit-numerique/4095/caisse-depot-cryptomonnaie-celsius-quebec https://ici.radio-canada.ca/recit-numerique/4095/caisse-depo...
- dubswithus 4y ago> However, our investigation shows that the Caisse's contribution to this round of financing amounts to $150 million. According to documents released by Celsius to financial authorities in Britain, CDPQ acquired 7,328 Series B shares of the company, at a price of $20,469 each. Yikes.
- graeme 4y agoOh thank goodness. I actually thought we put in $600 million
- dubswithus 4y agoUnfortunately, they may have put more into other rounds. Who makes these decisions? Considering crypto is so new is there even someone expert-level enough to advise a pension?
- tenpies 4y agoThey also nailed their timing in getting out of oil and gas - just in time for the sector at large to see a face-ripping rally and some of the best cashflows in any industry. Most fund managers would be fired, or quit, but because it's Green(TM), it was fine and good. https://www.thestar.com/business/2021/09/28/canadas-oil-industry-dealt-a-financial-blow-as-pension-giant-divests-itself-of-investment-in-fossil-fuel.html https://www.thestar.com/business/2021/09/28/canadas-oil-indu... The take away for all Canadians (the CPP is just as bad) is that these pension funds are just one more tax. You will be paid out, just nowhere near commensurate with what you put in. And that's even before the comical "inflation" adjustments and the intentional lack of currency hedge.
- Animats 4y agoThe hype: "Lenders have a lot to gain when they join Celsius. The platform pays out rewards as high as a 17% yield. These rewards are calculated by the system based on your loan terms and paid out every Monday." This is like a junk bond. You get a high yield in exchange for a risk of loss of the principal. So junk bonds require due diligence to price. You don't buy just one kind; you buy a diversified collection in hopes that they don't all go bust at once. In 2008, mortgage-backed securities did all go bust at once. In crypto land these things are blind pools. Customers have no idea where the pool operator is investing, and to what risks they are exposed. This is why there is a requirement for SEC registration. That's if it's honest. It might be an out and out Ponzi, like Madoff's. What the crypto crowd does not seem to get is that none of this is new. These are all old ideas in finance. In the 1920s, retail investors were being offered similar blind pools.
- haimez 4y agoIt’s kind of like the (public!!!) shares or options companies offered before the dot com boom. Too good to be true.
- Animats 4y agoNo, it's not. This is a high risk loan. Limited upside, unlimited downside.
- thethimble 4y agoDownside is limited to your principal investment.
- Animats 4y agoYou can't be busted to below zero, unless you borrowed to make the investment.
- haimez 4y agoYou’re right, the upside is fixed at 17% and my comment wasn’t really addressing the contents of yours, but the general sense of unease I get talking to people about their “crypto positions” as if having some > 1% (often a lot more) portion of their whole net worth “in crypto” is a reasonable part of a balanced portfolio.
- rdl 4y agoI kept a lot of money on them in 2021; was nice getting $1-2k/wk in "free money". I knew the risks, and have worked in the industry since before it was an industry, so no excuses. I pulled all my money from them (except $600 or so in dust) on Thanksgiving 2021. Thankful to (God? my minimally sufficient sense of self preservation finally kicking in?) for timing; and to their credit, it was a flawless withdrawal. But yeah; inevitable things happen, just often takes longer than one would expect.
- yunohn 4y agoSo you’re saying you knew it was an “inevitable” scam, and you’re happy that you were able to withdraw your earnings before a massive crash? I’m not surprised, I hear this exact thought process from a lot of crypto maximalists.
- syspec 4y agoI get the sense that his post was mostly just an excuse to flex on his gains
- johnisgood 4y agoWhat makes it an inevitable scam? People have a weird perspective on cryptocurrencies. I know that some people hold the belief that if they put some money in then if they get lucky they will be able to withdraw 10% of that, but I believe that it really is not what it is about. Welp.
- rdl 4y agoCelsius specifically; they were offering an income return for holding crypto (during a period of crypto appreciation), and the income was nice but ultimately not worth the principal risk. It was a long enough running business, with track record of allowing withdrawals, that the perceived risk wasn't as high as the real risk.
- thepasswordis 4y agoFull disclosure: I'm a crypto hyper-bull. That said: these weird DeFi platforms that were getting like 20% of whatever yields never made any sense to me. 20% isn't that great. You can get 15% on basic blackrock/vanguard funds. I just never could understand why people would tolerate this sort of risk for that little reward.
- headsoup 4y agoWhat is a 'crypto hyper-bull?'
- bunkydoo 4y ago
- outside1234 4y ago
- thepasswordis 4y agoNo, it just means that I’m very bullish about cryptocurrency. Bullish means optimistic. https://www.merriam-webster.com/dictionary/bullish https://www.merriam-webster.com/dictionary/bullish
- anon2020dot00 4y agoHe obviously understands what bullish is but is making a point of how most of crypto is a scam.
- djbusby 4y agoVery enthusiastic about the future and positive return on crypto.
- glerk 4y agoCelsius is not even a DeFi platform. It is some company that was promising users high yields without providing any transparency about how the deposited funds were invested. Also, a lot of the rewards were paid out in Celsius’ own token (CEL) which is now almost worthless. The risk/reward ratio was definitely not very good.
- outside1234 4y agoHow is that even legal?
- aero-glide2 4y agoFeature request : option to toggle off crypto news in HN
- jensenbox 4y agoThis feels a lot like a prediction for an upcoming "Run on the bank" - when everyone wants their cash out I am pretty sure that there will not be enough.
- tatertots1234 4y ago“Not your keys not your coins” is a mantra in crypto for a reason. If you deposit your tokens into an unregulated and unaudited bank promising above market returns from their opaque strategy, there is a high likelihood you’ll eventually run into trouble. Obvious solution is to encourage more regulatory framework around companies that claim to be custodial banks and investments. More audits, stable backings, and all of that.
- tarsinge 4y agoWhile I agree with the first part I don't see what it would change for the second: what is happening with Celsius is a good old bank run, and they have only like 10% liquid reserves. How long would it take to a well regulated bank be able to make all their assets under management liquid?
- tatertots1234 4y agoRegulated banks tend to have protections in place that avoid the possibility of users losing their funds.
- xur17 4y agoTheir "protections" are FDIC, which is basically a government insurance fund. With regards to Celsius, we don't know if they lost user funds, or if they are having a liquidity crisis. There's more detail here [0], but I think it's certainly possible that they do have user funds and simply cannot handle withdrawals for the majority of their user base all at once despite having the funds (much like a bank). [0] https://news.ycombinator.com/item?id=31720457 https://news.ycombinator.com/item?id=31720457
- marban 4y agoI assume most Celsius holders didn’t watch the tutorial. https://www.youtube.com/watch?v=3hG4X5iTK8M https://www.youtube.com/watch?v=3hG4X5iTK8M
- floppiplopp 4y agoCan't be long now until cryptobros propose some sort of crpto federal reserve to save their scam, i mean, stabilize the currency.
- jpmoral 4y agoFrom their ToS > Celsius does not make any representation as to the likely treatment of Digital Assets in your Celsius Account, including those in a Custody Wallet, in the event that you, Celsius or any Third Party Custodian becomes subject to an insolvency proceeding whether in the U.S. or in any other jurisdiction. You explicitly understand and acknowledge that the treatment of Digital Assets in the event of such an insolvency proceeding is unsettled, not guaranteed, and may result in a number of outcomes that are impossible to predict reliably, including but not limited to you being treated as an unsecured creditor and/or the total loss of any and all Digital Assets reflected in your Celsius Account, including those in a Custody Wallet. I don't understand why anyone would put money in.
- apienx 4y agoIt looks like Celsius is illiquid (not insolvent). Yes, they still offer 16.8% yield on SNX (a high-inflation one) if you earn in CEL token but demand for SNX yield on Celsius is so low that I don't see a problem with any of that. They acquired the leading custodial service (GK8) some time ago so funds are safu IMO. Their current illiquidity crisis is due to them having to loan/stake coins to generate yield. Celsius also doesn't have lockdown periods which makes risk management very tricky. Plus, they have zero-fee trading. I can see Celsius becoming _the_ one-stop shop for novices once they release the card and on/off-ramp services. This is not an ideal situation, but is perfectly acceptable when you consider where the yield comes from.