Celsius was once a $28 billion giant that has plummeted by 88 percent
Celsius was once a $28 billion giant that
has plummeted by 88 percent this year.
At the end of 2021, Celsius claimed to have $28.6 billion in assets under management. To avert possible insolvency, it halted withdrawals indefinitely this weekend. It now claims to own only 151,534 bitcoin ($3.3 billion) in assets, a drop of 88 percent.
Customers who deposit various crypto assets earn extremely high interest rates from the organisation. On'stablecoins' like USDT, USDC, BUSD, and GUSD, it's still offering 9.32 percent APY. Other assets have rates as high as 18.63 percent APY.
It's worth noting that so-called'stablecoins' aren't always stable. This lesson has been taught to the world by the collapse of Terra LUNA's $1'stablecoin' to less than one penny.
Almost every $1-pegged coin has lost its peg at some point, including Tether, the most popular "stablecoin" that has traded as low as $0.001 and as high as $1,000. Some, like TerraUST, will never be able to recover.
Customers who consented to receive payments in Celsius's proprietary token, CEL, received even greater rates. CEL has lost 94 percent of its value this year.
Many cryptocurrency traders are fighting for the opportunity to buy Celsius' bitcoin. As of late Monday night, the corporation had a loan balance of 23,952 wrapped bitcoin with a liquidation price of $16,851 per bitcoin owed to decentralised finance lender aave.
It's possible that $16,852 bitcoin will be mined. Bitcoin has now lost 68 percent of its value since its all-time high. Bitcoin traded as low as $20,816 on Monday night, about 19 percent below Celsius' liquidation price. Nexo, a direct competitor of Celsius, has already expressed interest in discussing a distressed asset sale.
Celsius has had a lot of run-ins with regulators.
The corporation has had a tumultuous relationship with law enforcement in the past. Its run-ins with regulators are likely far from done, despite its implosion this week.
Tether is a big shareholder in Celsius. Celsius had $500 million invested in Terra LUNA's doomed Anchor protocol. Last year, Israeli authorities detained the company's chief financial officer, Yaron Shalem, for his ties to crypto billionaire Moshe Hogeg. The New Jersey Bureau of Securities issued a cease and desist order to the company last year.
State regulators in Texas, New Jersey, and Alabama demanded the business to explain how its Earn Rewards programme complied with securities laws in September 2021. Celsius reportedly lost $54 million thanks to Metamask, a consumer-grade single-signature software.
