{"id":37591,"date":"2022-06-15T17:34:05","date_gmt":"2022-06-15T14:34:05","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=37591"},"modified":"2025-08-29T18:52:53","modified_gmt":"2025-08-29T15:52:53","slug":"what-happened-to-celsius-cel","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/what-happened-to-celsius-cel\/","title":{"rendered":"What happened to Celsius (CEL)?"},"content":{"rendered":"<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Key points<\/h2>\n<ul class=\"wp-block-list\">\n<li>On 13 June 2022, the price of crypto\u2011lending platform <a href=\"https:\/\/celsius.network\" target=\"_blank\" rel=\"noreferrer noopener\">Celsius<\/a>\u2019s native token (CEL) fell by about 50% after the company said it was suspending withdrawals amid \u201cextreme market conditions\u201d.<\/li>\n<li>Experts say the decision may have been driven by losses on high\u2011risk DeFi instruments, notably collateralised synthetic assets.<\/li>\n<li>After freezing client funds the platform took steps to stabilise its business. Following the initial plunge, CEL quickly recovered.<\/li>\n<\/ul>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\"><strong>How many customers does Celsius Network have?<\/strong><\/h2>\n<p>Celsius is a centralised crypto\u2011lending platform whose core services are crypto deposits and crypto\u2011asset loans. It presents itself as a bank alternative and offers financial services tied to cryptoassets.<\/p>\n<p>The founders of Celsius Network are Alex Mashinsky, Nuke Goldstein and S. Daniel Leon. The platform launched in 2017; a year later the team issued its own token, CEL.<\/p>\n<p>According to Crunchbase, the company has raised more than $860m in funding.<\/p>\n<p>As of December 2021 Celsius managed $24bn of user assets; by end\u2011May 2022, Financial Times reported, that figure had fallen to $12bn. In November 2021 the platform said it had 1.2m users.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Who can use Celsius?<\/h2>\n<p>The platform <a href=\"https:\/\/www.reddit.com\/r\/CelsiusNetwork\/comments\/qvz017\/cant_seem_to_find_info_on_what_countries_celsius\/\" target=\"_blank\" rel=\"noreferrer noopener\">does not disclose<\/a> the exact list of supported countries or the services available in each. It launched in the United States and was initially available to all residents, but in April 2022, under regulatory pressure, it limited access to accredited investors. US users also face specific rates for both loans and deposits. Celsius is known to operate in several European countries.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\"><strong>How do crypto deposits work on Celsius?<\/strong><\/h2>\n<p>Celsius Network offers interest\u2011bearing deposits in various cryptocurrencies at attractive rates. For example, as of 14 June 2022 the maximum rate on USDC stablecoin deposits exceeded 9% per year; for DAI it was over 6%.<\/p>\n<figure class=\"wp-block-image size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/celsius.network-min-1024x819.png\" alt=\"What happened to Celsius (CEL)?\" class=\"wp-image-149909\" width=\"768\" height=\"614\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/celsius.network-min-1024x819.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/celsius.network-min-300x240.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/celsius.network-min-768x614.png 768w, https:\/\/u1f987.com\/wp-content\/uploads\/celsius.network-min.png 1200w\" sizes=\"auto, (max-width: 768px) 100vw, 768px\" \/><\/figure>\n<p>Yields depend on several factors. Clients can receive interest in the deposit currency. If they opt to be paid in CEL, the platform\u2019s token, the rate is higher. The more CEL on the account, the higher the yield. The bonus ranges from 10% to 30%. Interest is paid weekly.<\/p>\n<p>Celsius also offers loans secured by cryptoassets. Users can lock various cryptocurrencies as collateral and borrow in a chosen stablecoin.<\/p>\n<p>The lending rate depends on the loan\u2011to\u2011value ratio (LTV). The higher the LTV, the more collateral a user posts, the lower the rate. In effect, Celsius uses overcollateralisation as a safeguard against changes in collateral value.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\"><strong>What else does Celsius Network offer?<\/strong><\/h2>\n<ul class=\"wp-block-list\">\n<li>CelPay \u2014 a crypto\u2011payments service. It lets users send assets to other users, including those without a crypto wallet. No transfer fees are charged.<\/li>\n<li>Celsius Swap \u2014 a fee\u2011free trading venue supporting more than 40 cryptocurrency pairs.<\/li>\n<li>CelsiusX \u2014 a Celsius division focused on integrating DeFi products into the main platform.<\/li>\n<\/ul>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">What went wrong?<\/h2>\n<p>On 13 June 2022 Celsius suddenly announced it was halting withdrawals \u201cto protect the community\u201d and \u201cdue to extreme market conditions\u201d. CEL duly plunged.<\/p>\n<p>Experts believe the real reason is that the platform can no longer earn enough to cover client yields. Analyst Jack Niewold called it a \u201cliquidity crisis\u201d.<\/p>\n<p>Meanwhile, according to journalist Colin Wu, shortly before the announcement Celsius transferred around 104,000 ETH and 9,500 WBTC to the FTX exchange.<\/p>\n<p>According to <a href=\"https:\/\/apeboard.finance\/dashboard\/0x8aceab8167c80cb8b3de7fa6228b889bb1130ee8\" target=\"_blank\" rel=\"noreferrer noopener\">Ape Board<\/a>, in mid\u2011June 2022 Celsius wallets held assorted assets worth more than $1.5bn. Roughly 30% was stETH and about 27% WBTC. The funds were deployed in decentralised protocols: 60% in Aave and another 35.5% in Compound.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\"><strong>Did Celsius invest in Terra?<\/strong><\/h2>\n<p>A month before Celsius ran into trouble, another big blockchain project, Terraform, and its two flagship cryptoassets \u2014 the LUNA coin and the algorithmic stablecoin UST \u2014 collapsed. Observers have inevitably looked for links between the two events.<\/p>\n<p>In late May the blockchain\u2011analytics service Nansen <a href=\"https:\/\/www.nansen.ai\/research\/on-chain-forensics-demystifying-terrausd-de-peg\" target=\"_blank\" rel=\"noreferrer noopener\">published<\/a> an investigation claiming Celsius was a large holder of Terraform\u2019s ill\u2011fated algorithmic stablecoin UST. The company allegedly used the coins for high\u2011yield farming on Aave. Celsius became one of the \u201cwhales\u201d that rushed to pull funds from the Terra ecosystem after Anchor cut UST staking yields.<\/p>\n<p>Platform founder Alex Mashinsky <a href=\"https:\/\/twitter.com\/mashinsky\/status\/1530535657902424064\" target=\"_blank\" rel=\"noreferrer noopener\">denied<\/a> this. Even so, on 13 May Celsius publicly said it had withdrawn more than $500m worth of ether from that very Anchor.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\"><strong>Does Celsius use Lido?<\/strong><\/h2>\n<p>The platform also actively deploys client funds in the Lido protocol. Lido enables liquid staking: users can stake cryptocurrencies and, without withdrawing them, receive an equivalent amount of synthetic tokens to use across other DeFi applications.<\/p>\n<p>Ethereum is the most popular asset on Lido. When staking ETH via Lido, a user receives stETH and earns staking income. As of 14 June 2022 Celsius held at least $475m in stETH.<\/p>\n<p>The nuance is that the \u201cbase asset\u201d, i.e., ETH, can be withdrawn from staking only after the Ethereum 2.0 network activates The Merge. That will not happen for at least several months. stETH can be used only in DeFi protocols. And although the \u201cderivative\u201d token should track ETH, amid Celsius\u2019s woes stETH had already fallen by 5%.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\"><strong>Where does MakerDAO come in?<\/strong><\/h2>\n<p>Lucas Nuzzi, head of R&amp;D at CoinMetrics, <a href=\"https:\/\/twitter.com\/LucasNuzzi\/status\/1536695944380616704\/photo\/1\" target=\"_blank\" rel=\"noreferrer noopener\">noted<\/a> that Celsius manages one of the largest WBTC (\u201cwrapped\u201d bitcoin) vaults in MakerDAO. Using that collateral the platform mints the DAI stablecoin. As crypto markets corrected, the value of the collateral kept falling. To avoid liquidation, in June Celsius raised the WBTC in its vault from about 18,000 to around 24,000 tokens.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Is Celsius to blame for the crypto\u2011market slump?<\/h2>\n<p>As the crypto\u2011lending platform\u2019s problems hit the headlines, the market kept falling: on 13 June the bitcoin price dropped below $23,000 and ether to roughly $1,300.<\/p>\n<p>Although many tied the slide to the negative news flow, experts agree the real driver is macroeconomics \u2014 notably expectations of another US rate rise and further inflation.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">What next?<\/h2>\n<p>Although Celsius\u2019s standing took a hit, the project may yet turn the situation around. By 15 June the CEL price had returned to, and even exceeded, its pre\u2011crisis level.<\/p>\n<p>Observers noted at least several steps the platform took to stabilise operations: <\/p>\n<ul class=\"wp-block-list\">\n<li>It materially increased collateral in its MakerDAO vault, lowering the WBTC liquidation price to $14,000.<\/li>\n<li>It increased ETH collateral for its stETH positions on Aave and repaid a $2.4m USDC debt.<\/li>\n<li>According to media reports, Celsius hired lawyers, possibly to pursue a financial restructuring. The platform is now considering ways to raise additional capital.<\/li>\n<\/ul>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">What else to read?<\/h2>\n<p><a href=\"https:\/\/u1f987.com\/en\/news\/what-is-lido\">What is Lido?<\/a><\/p>\n<p><a href=\"https:\/\/u1f987.com\/en\/news\/what-is-aave\">What is Aave?<\/a><\/p>\n<p><a href=\"https:\/\/u1f987.com\/en\/news\/what-are-algorithmic-stablecoins\">What are algorithmic stablecoins?<\/a><\/p>\n<p>What is MakerDAO?<\/p>\n<p><a href=\"https:\/\/u1f987.com\/en\/news\/what-is-compound-comp\">What is Compound?<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Why did Celsius freeze withdrawals? How is it linked to Lido and MakerDAO? Is Celsius to blame for the crypto sell-off? Explained in cards.<\/p>\n","protected":false},"author":1,"featured_media":37592,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"3","_short_excerpt_text":"Celsius froze withdrawals, roiling CEL; the platform\u2019s ties to Lido and MakerDAO, and what comes next.","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[2113],"tags":[2118,1348,1097],"class_list":["post-37591","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptorium","tag-101-trading-and-investing","tag-celsius-network","tag-lending"],"aioseo_notices":[],"amp_enabled":true,"views":"59","promo_type":"1","layout_type":"1","short_excerpt":"Celsius froze withdrawals, roiling CEL; the platform\u2019s ties to Lido and MakerDAO, and what comes next.","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/37591","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=37591"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/37591\/revisions"}],"predecessor-version":[{"id":37593,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/37591\/revisions\/37593"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/37592"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=37591"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=37591"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=37591"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}