I feel terrible for mom and pop retail investors who decided to buy-in to Crypto at the beginning of the year, but that old adage, "A Fool and Their Money are Soon Parted" rings true.
MacKenzie Sigalos at CNBC Reports:
In October 2021, CEO Alex Mashinsky said the crypto lender had $25 billion in assets under management. Even as recently as May — despite crashing cryptocurrency prices — the lender was managing about $11.8 billion in assets, according to its website. The firm had another $8 billion in client loans, making it one of the world’s biggest names in crypto lending.
Now, Celsius is down to $167 million “in cash on hand,” which it says will provide “ample liquidity” to support operations during the restructuring process.
Meanwhile, Celsius owes its users around $4.7 billion, according to its bankruptcy filing — and there’s an approximate $1.2 billion hole in its balance sheet.
If something sounds too good to be true, friends, it is.
Three weeks after Celsius halted all withdrawals due to “extreme market conditions” — and a few days before the crypto lender ultimately filed for bankruptcy protection — the platform was still advertising in big bold text on its website annual returns of nearly 19%, which paid out weekly.
“Transfer your crypto to Celsius and you could be earning up to 18.63% APY in minutes,” read the website on July 3.
I'm having a really hard time looking at the current state of Crypto and thinking that it's legit and not a Ponzi Scheme (much like how I look at NFTs and think about Money Laundering).
