- Celsius Network, once a major crypto lender, has filed for bankruptcy and begun liquidating assets amid recent crypto market volatility. This highlights the risks of the lightly-regulated crypto lending industry.
- Celsius has sold around $250 million in crypto assets over the past month, with the majority being Ethereum. This constant selling pressure may be suppressing ETH’s price gains.
- Celsius offered unsustainably high yields to depositors by lending funds in unsecured, risky ways. Tighter oversight of crypto lending firms could help avoid instability and protect consumers.
Celsius Network, once one of the biggest cryptocurrency lenders, has fallen into bankruptcy and begun liquidating assets amid the recent crypto market turmoil. The firm’s demise serves as a cautionary tale for the risks of the unregulated crypto lending industry.
Celsius Dumps $250 Million in Crypto Assets
The bankrupt firm has sold off around $250 million worth of digital assets over the past month according to on-chain data. This includes $243 million in Ethereum along with Chainlink’s LINK, Polygon’s MATIC, and other tokens. Observers believe Celsius is raising capital to invest in a new Bitcoin mining venture as part of its restructuring.
Ethereum Bears the Brunt
Ether has taken the biggest hit from Celsius’ selling activity. The constant ETH dumping from Celsius may be suppressing Ethereum’s price gains compared to other major cryptocurrencies lately. However, some analysts think the selling pressure could now be over, potentially allowing ETH to rise again soon.
The Dangers of Unregulated Lending
Celsius offered unsustainably high yields to depositors, lending out their funds in unsecured and risky ways. Its collapse highlights the dangers of the lightly-regulated crypto lending industry. Rules are needed to protect consumers from excessive risks.
Celsius’ Future Remains Unclear
It’s still uncertain what Celsius’ new mining venture will look like and whether the firm will ever resume operations. For now, its creditors and clients face major losses. The Celsius saga serves as a warning about the instability of crypto lending. Tighter oversight of these firms could help avoid similar blowups.
