A week after it began its withdrawal freeze, the Celsius Network was alerted to a significant increase in fraudulent Celsius accounts purporting to be connected with the firm. The firm also works with regulators to solve withdrawals, swap, and transfer delays.
Bot Accounts Invading the Platform
There has been an increase in accounts “falsely purporting to be associated with Celsius,” according to the lender, who urged people to be more cautious in a blog post. The firm is now taking a “multifaceted approach” to address the issue. This includes working with law enforcement and blocking accounts created with “bad faith.”
Celsius also said it would be increasing its customer support team to help those affected by the fake accounts. In addition, the firm is working on a new KYC (know your customer) process that will be rolled out in the next few weeks. According to Celsius, this will help “weed out bad actors” and ensure that people using the platform are doing so legitimately. The firm said it is also working on improvements to its security systems, which will be rolled out in the coming weeks.
Also, it is delaying some of its communication platforms, including Twitter Spaces and AMA sessions, to focus on its ongoing liquidity and operations problems.
Nonetheless, the firm has yet to provide any information regarding when users will be able to resume withdrawing their funds.
Short Squeezing on CEL
Meanwhile, the #CELShortSqueeze hashtag has trended in the Business and Finance category on Twitter, similar to a squeezing movement, identical to the GameStop stocks in 2021. In addition, users have uploaded photos of their CEL purchases to show their support for the initiative.
According to Twitter user TheTwitOnline, CEO of Celsius Alex Mashinsky should notice how the community is supporting the project and work to increase CEL’s value and usefulness. On June 20, BnkToTheFuture co-founder Mark Dixon offered a solution to the Celsius disaster. According to Dixon, Bitfinex’s approach to coping with its notorious assault worked, and he encouraged Celsius to adopt similar measures.
FTX CEO Sam Bankman-Fried denied reports that Alameda Research was involved in the present Celsius problem. While Bankman-Fried has stated that Alameda is working to prevent future cryptocurrency damage due to Celsius’ issues, he also emphasized that it would be “irresponsible” to commit to anything. It is still unclear when the Celsius Network will resume its operations. In the meantime, users are advised to be vigilant about fake accounts and short squeezes.