Insolvency on the cards for Celsius Network

Hold onto your wallets it is a wild one out there but if it's one thing we know is that bear markets don't often last long. These become the wild storms that produce some pretty large out comes later on in the year or years to come.

But it definitely can be scary for folk especially if you're new to Crypto and if you experience your first Crypto crash. Although there are some other factors contributing to the current decline which is also impacting stock exchanges across the globe.

Many are expecting a recession and with interest rates on the rise there are many calling in their positions to pay down debt. One the initial debt paydown ends and interest rates stabilise we will probably see a return to normal trading. What will Bitcoin bounce back to? no one knows but everyone is eager to know.

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Crypto Deaths

Much like any free market capitalist initiatives recessions tend to take some people out of the game as markets react. One of those players currently up for collapse is the centralised exchange Celsius. Despite people calling for regulation Celsius is a regulated exchange and a good example on how regulation can't save you from bad investment and that people need to do their own research.

Celsius is a regulated crypto exchange that enables participants the ability to earn a return on crypto assets held. Other options available is the SEC approved collateralised crypto loans provided by Celsius which is the largest crypto lending platform on the planet.

What do they do with your cash?

Here's the kicker, no one really knows how they operate as transparency is quite low within the organisation and most recently the US state of Kentucky ordered Celsius to cease and desist providing services to their residents. Based on not being transparent enough with peoples money.

Letters from government agencies tend to be more and more common these days but this one has a little merit to it as Celsius finds itself in deep water. Recently pausing all trades and transfers on it's network to honour its withdrawal obligations over time.

This is a key indication that the centralised exchange may not have the ability to fulfil the withdrawals mainly due to what is coming to light recently, their own failed investment strategy which has potentially left them high and dry.

The recent BadgerDAO hack which Celsius was invested in cost the company a total of $ US50 Million worth of Bitcoin and it wasn't the only project it was deep into with information recently surfacing that Celsius was in fact one of the Terra Whales with an account valued at $US500 Million worth of UST farming the 20% APY in Anchor Protocol when UST became depegged.

Celsius portfolio continues to crumble

There is further information coming in on Twitter that suggests Celsius has further funds locked in on the Ethereum Beacon Chain valued at $US400 Million but unfortunately can not be unstaked as yet.

So the company maybe experiencing a significant liquidity issue as their 1.7 Million users rush to exit their holdings in a crash leaving Celsius without the liquid cash or assets to provide them.

Celsius's days maybe numbered leaving it with not many options but to claim insolvency and file for bankruptcy.

Image Sources provided supplemented with Canva Pro subscription. This is not financial advice and readers are advised to undertake their own research or seek professional financial services.

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