‘Celsius’ may be behind the collapse of cryptocurrencies! Is there a second Terra (LUNA) case?

Cryptocurrency markets have been making investors vomit blood for the past two days. like that bitcoinone of the strongest support levels in recent periods. Even the $29k tire Went down. Bitcoin, which has fallen to the $21,000 level in the past 24 hours, at the time of writing this article. 22 thousand 400 dollars watching levels. The situation with altcoins is worse than with Bitcoin. So what happened to the markets? What is behind this decline?

In fact, the cryptocurrency markets were walking on a very thin tightrope. Happened about 1 month ago Terra (LUNA) eventto the markets damaged trust, even dollar-indexed altcoins (always around $1) were viewed with suspicion. Some people believe that the main reason for yesterday’s decline is: Celsius believes so. So what is this Celsius thing?

Celsius gave loans on cryptocurrencies, generating interest income

Celsius, one of the names in the industry for a long time, with its simplest explanation. loan and interest income branch. The company promised certain returns to cryptocurrency investors and took the investor’s money. The money in the pool was also lent to others as a loan. a standard sofa The company, which adapted its operating principle to cryptocurrency, was therefore occasionally confronted with the competent authorities.

Celsius managed to become one of the companies that caught the attention of investors. The company, which performed very well in 2020 and 2021, has had that since the end of last year. valuation of $10 billion reaches. So how did these guys make money? Actually, the system was very simple. The percentages of profit given to the investor were kept at a reasonable level and the increasing profits were transferred directly to the company. Moreover interest-bearing loan†

Terra (LUNA) collapse creates domino effect for Celsius

The first incident to reportedly set a stone in Celsius’s work was the Terra (LUNA) scandal. After all, the company was required to give bets to its participants, but the collapse of Terra (LUNA)’s stablecoin UST, Let Celsius hurt had caused. It is claimed that the damage here could be around $500 million. But that’s not the whole problem. Investor tries to escape when markets fall he wanted to withdraw his money† And that puts things in an even bigger stalemate for Celsius. Because while the company kept some of its deposits in locked Ethereum pools, the cash shortfall has reached levels it never has.

Almost all of the company’s assets are owned by customers.

Jack Niewold, who has voiced the allegations we’ve made so far, also spoke about the company’s assets in his Twitter post. Reportedly $10 Billion in Celsius Money property of the customer† The size of the company’s own money is only $1.5 billion, and this money is kept in various cryptocurrency wallets. good scissors between It’s open at an unprecedented level, and it’s hard to get out of here.

Withdrawals suspended!

Celsius is aware of the problem. As a result, the investor has spiteful made a decision. As part of this decision, all withdrawals and transfers on the platform were suspended. The company cited “extraordinary market conditions” as the reason to stop trading, but the main reason was that it wanted to withdraw money. able to pay the investor absence shows.

What happens now?

Celsius has several options for it. One is to be able to give the money to be withdrawn to the customer. Also for this provide cash needs. Celsius can pay out of its own budget, if there is one, or save its customer by borrowing huge amounts. However, if these cannot be done, the biggest problem arises. Company, can come to the point of bankruptcy and even declare bankruptcy† If this opportunity arises, the shattered trust in the cryptocurrency community could be easy can’t recover we can say. Because there’s $10 billion in money…