At a dinner in New York in 2018, Alex Mashinsky, the founder of Celsius Network, sought out large-scale crypto-traders known as “whales” to invest in his startup. The goal was to attract these individuals, who are known for moving markets and can speak with a certain amount of authority, to his company.
According to a person who was at the event, who was not authorized to speak about the details of the event, the Ukraine-born entrepreneur talked about his vision for the future of cryptocurrencies and how he wanted to establish an alternative financial system.
During his presentation, he noted that the Celsius Network’s high yields were attractive to depositors, who would be able to get a 30% return on their money. He also said that the company’s lending rates would be competitive with those of other financial institutions.
Due to the sudden decline of the cryptocurrency market, the company has temporarily stopped all of its users from withdrawing their money. It has also frozen the deposits of around $8 billion. The company noted that it was unable to provide its users with the necessary information to make informed decisions.
The company’s problems are a reflection of the rapid emergence and decline of cryptocurrencies during the past 18 months. Although it is difficult to predict exactly how the company will eventually emerge from its current situation, many investors are waiting to see if it will seek to file for bankruptcy or unfreeze its assets.
Due to the lack of federal regulation and the lack of transparency regarding the operations of private companies operating in the crypto market, it is difficult to predict which resolution will be reached.
With the company’s recent problems, the officials in New Jersey and Alabama have temporarily barred the company from making deposits in their states. Joseph Borg, the securities commissioner of Alabama, noted that the situation has affected other jurisdictions as well. According to Borg, the recent developments have prompted the officials to step up their investigation.
Neither the company nor its CEO, Vladys Mashinsky, would comment on the situation. Instead, they directed reporters to the company’s social media accounts. On Sunday, the company released a blog post stating that it was working to maintain its liquidity and operations.
Dil Bole Oberoi
