Celsius Network’s collapse as a trigger for the Bitcoin crash
In May, the Terra USD cryptocurrency caused the market to collapse, leaving concerns, extreme fear, and distrust in cryptocurrency projects. Many people opted to start withdrawing their investments causing lows in coins like bitcoin that had not been seen in a while. Now, this past week we have seen a new drop-in cryptocurrency project which has left bitcoin at an all-time low that it has not been at since 2019. This has happened because cryptocurrency lending platform Celsius Network left 1.7 million users unable to redeem and withdraw their assets as they made the decision to freeze withdrawals in bitcoin, excusing themselves on “extreme” market conditions, thus highlighting one of the biggest mistrusts in the cryptocurrency industry: Weak collateral for investors. Now looking at the legality framework part, cryptocurrency platforms like Celsius Network are always seeking to be regulated by the US market, but they always run into roadblocks and have been too slow to provide the clarity needed to protect users, but expect that to change soon. As extra context, crypto lender platforms like celsius network collect crypto deposits of bitcoin or any cryptocurrency from retail customers and reinvest them. Sometimes with very good returns to be true double digits, these products have attracted tens of billions of dollars in assets. However, with its investments worsening amid the cryptocurrency market downturn, especially bitcoin, Celsius was unable to pay out refunds. As a result, its clients had little visibility into how their assets were invested and it is unclear whether they will get them back. Celsius CEO Alex Mashinsky tweeted Wednesday that the company is focusing on customer concerns “Investors want to know their assets are safe,” said Mike Belshe, chief executive of BitGo, a digital asset trust company. “We’re going to see a shakeout of healthy companies that manage risk well.” Here at The Blue Manakin, we are always out to educate and stay on top of what’s happening in the crypto world. We always remember the importance of researching where we put our money, and everything that backs a project on the blockchain, be this the people behind it, especially in your marketing company, we have years of experience to back us up
