The depth of detail of events that began with Celcius (actually, they began with the collapse of Luna and Celcius is the next chapter in the story) is so broad and deep that I think I will have to outline everything in a Medium piece. So be it. I’ll do a TL;DR instead.
Celcius is a platform that has been around since 2015 that allowed people to deposit their crypto and earn yields (a lot like a traditional bank,) and also borrow crypto (which was charged interest, similar to how traditional banks loan money.) The problem was, that in order to be competitive with other platforms (as well as smart-contract driven decentralized platforms and liquidity pools,) they had to derive income from defi protocols and liquidity pools. When prices fell, it turned out they lacked the liquidity to to maintain their positions. As a result, they had to freeze all withdrawals to maintain what asset base they had. As of this writing, withdrawals are still locked and the platform has retained legal guidance for how to either restructure or cover their positions.
In the midst of all this, we come to discover that a gigantic investment fund, Three Arrows Capital, is experiencing a liquidity crisis stemming from dropping token prices and from platforms like Celcius in crisis.
In short, we’re seeing a cascade effect happening in front of our eyes, and more platforms, companies, and possibly protocols will buckle under.
And you can be 100% certain that this will add fuel to rhetoric and the eventual regulations and laws around disclosure and compliance for these platforms.
As a side note, it wasn’t until someone uncovered it that we learned that Celcius was starting up a bitcoin mining operation.
More to come, please read through the tweets below to learn more. They are very detailed and give good picture of how bad the situation is.
Be well, Everyone.
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Articles on Medium this week
The Cost of Crypto Podcast
This Week In Twitter
CBDC (are just Surveillance Tokens)
Company / Product / Project News
DeFi and Lending
–What’s Going on With Celsius Network and Why Is It a Huge Risk for Crypto
–‘Few Are Feeling OK’: Celsius Investors Unlikely to Fund Bailout: Report
–Texas securities regulator investigates Celsius over withdrawal suspension: Report
–Magic Internet Money token depegs as Terra (LUNA) domino effect persists
–BlockFi liquidates major counterparty after it fails to meet margin call
–BlockFi fined $943,000 for not registering securities in Iowa; to pay $100M in settlement
–Crypto lender Babel Finance halts withdrawals due to liquidity pressures
–NEXO price drops 40% in three days on rumors of ties to ‘insolvent’ crypto fund
–SEC Chairman Warns of Crypto Lending Platforms With Unrealistic Returns
–This Week In DeFi – June 17
Fundraising and Sponsorships
Implementation and Infrastructure
Metaverse / Web3
–Russia: Oil Company Gazpromneft To Launch a Cryptocurrency Mining Operation With BitRiver
–Ethereum mining no longer profitable for many miners as energy prices and ETH dip cause perfect storm [with the Merge coming, GPU mining is looking a LOT less appealing]
–Texas Is The Bitcoin Mining Capital
–Crashing Prices Expose Bitcoin Mining Industry’s Addiction to Leverage
Nation States (and other political jurisdictions)
–Panama’s President Partially Vetoes Crypto Regulations
Regulation, Legislation & Legal Matters
–Circle launches euro-backed stablecoin EUROC
–The BTC origin story: Who designed the Bitcoin logo?
You Do Not Change Bitcoin. Bitcoin Changes You.
“Bitcoin will eat the world.” And it is.
Categories: Weekly Headlines