Celsius Pauses Activity on Social Sites to Focus on Prevailing Crisis
- DeFi platform Celsius has today announced that it has paused its Twitter and AMA spaces to allocate its effort to resolving its current issue.
DeFi platform Celsius Network has today halted its online social engagement activities, specifically its AMA and Twitter. The move has been done in an effort to give deeper focus to their current predicament.
It has been a week now since the company paused all customer withdrawals indefinitely, citing a liquidity shortage. Celsius said it was working around the clock to resolve the issue, but that it would “take time.”
Celsius Pauses Social Engagement, Involves Regulators
Apart from the closure of its social spaces, Celsius has added that it is working with regulators on a solution. In the past week, the company also noted that it had hired restructuring lawyers for the same reason.
In its heyday, Celsius was one of the DeFi industry’s colossus projects, offering earnings of up to 18.63% APY. Just like any other entity, Celsius was befallen with criticism for its high-yield structure, with some citing sustainability risks. None of this came to be until the recent market downturn.
As it tried to figure out the next steps, rival Nexo became an early mover, offering the platform a buyout. Nexo touted its high liquidity, saying it was capable of ensuring Celsius’ clients can make withdrawals soonest.
Simon Dixon, CEO, and co-founder of BnkToTheFuture.com – an online investment platform – also offered a possible recovery plan for Celsius. He did not specify exactly what it was, but said it was a financial innovation plan that involved “security tokens, debt, and equity.” He noted that the solution he gave had previously worked in the case of Bitfinex’s hack of 2016. Note that Dixon is one of the project’s shareholders and lenders.
Fall of One, Fall of All
Celsius is not the only crypto-invested platform currently between a rock and a hard place. There is also Finblox, Babel Finance, and the hedge fund Three Arrows Capital. The first two had to suspend withdrawals or cap them, while the latter is on the verge of insolvency. The latest to experience similar challenges is the decentralized exchange Bancor Network. Just recently, the platform imposed a temporary pause on its impermanent loss insurance to all liquidity providers.
All of the above situations show that weaknesses in some of crypto’s projects likely come up during periods of market crisis. But even then, it is safe to say that the fall of one affects the rest of the crypto industry. Events such as the Terra (LUNA) fiasco caused widespread negative investor sentiment.
For now, Celsius has asked its users to remain vigilant of fraudsters posing as Celsius personnel. The firm has also warned that the so-called CEL 2.0 token is fake.
At writing time, the platform’s digital token, CEL, was trading at $0.85, having gained 33.9% in the past day.