Celsius founder withdrew $10 million before bankruptcy
About 3 months ago, one of the most popular centralized crypto platforms, Celsius, collapsed leaving user funds at risk. I wrote an article about it, but I can't seem to find it at the moment and I'm tired so... Sorry. They blamed their insolvency largely in part to the collapse of Terra Luna, which they had placed a lot of customer funds in. The platform was basically a fancy ponzi scheme. The only way to keep it sustainable is to keep attracting new money... Then using the new money to pay out a percentage to "stakers" on the platform. If it looks like a ponzi scheme, acts like a ponzi scheme, and collapses like a ponzi scheme... Odds are it's probably a ponzi scheme.
Did I say "ponzi scheme" enough? Sorry about that, but some people would argue and say that it wasn't. When you can't account for where the yield comes from, odds are that you are the yield. Anyway - Celsius shortly after filed for Chapter 11 bankruptcy leaving investors at a huge loss. People lose their life savings, people lost their homes, and it was an overall really shitty situation that could have been avoided. Supposedly there is a chance that customers could get refunds, but I highly doubt it.
That the L and move on. Celsius was a bad move for investors, and I'm truly glad I avoided it. I'll stick to DeFi that pays more yield and I still control my crypto... Not a platform that acts like a bank.
In May, about a month before the bankruptcy filing, Celsius founder Alex Mashinsky withdrew $10 million in crypto assets from the platform. It almost looks like he knew it was coming... What a shock that would be. Look, until a court hearing happens on the situation, no one can say it was related to the collapse... But again, if it looks like a duck, acts like a duck, odds are it's probably a duck. He withdrew the funds right before the freeze of deposits and withdrawals on the service, leaving the customers holding onto hope. I personally think he knew the halt was coming, and wanted to make sure he secured his bag.
A Celsius representative said he withdrew the funds to pay state and federal taxes. He supposedly still has $44 million worth of crypto locked in the platform that is basically dead. This could be totally legit and be a total coincidence with the events that occurred, sure. I just highly doubt it. I won't keep saying he knew it was coming but I'm just a weird dude on the internet. It will come down to what the judge decides in court at the end of the day. He probably had plenty of money already, so it's no biggie.
With the way bankruptcy works, though... He could be forced to pay back that $10 million since it was withdrawn within 90 days leading up to the filing. This is a really good fraud prevention measure, and I hope he has documents to prove it was legit.
According to Celsius' latest blog post, there could be hope that funds get their money back. Go ahead, lick your wounds, and take a fat rip of hopium. You're probably going to need it. I sincerely hope those that lost any amount of money due to the collapse are doing well. I hope you get your money back. I wouldn't hold my breath though.
The next court hearings for Celsius are in a few days, and you can get the updates on the blog linked above. The lesson here is... Don't put your money into centralized platforms offering insane yields that you can't explain. If they don't clearly spell out where the yield comes from... You are the yield. Your money is what pays the yield. Not theirs. Don't be sheep. Use DeFi like Cub Finance and PolyCUB.
Article written by: @l337m45732 AKA 0xNifty.nft
Posted Using LeoFinance Beta
Diversification is the be-all and end-all. then an investor can also cope with a cryptoscam. Like celsius or terra luna.
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Very interesting and analytical fix, @lbi-token. I agree with your analysis.
Crazy big payoffs for not being able to explain how it works and where the funding comes from is a ponzi scheme indicator. So, the precautionary principle is where we should put our money.
If later it turns out to be declared bankrupt by the court, then hope is all hope.
Wow. This phrase say it all. We should never pay a blind eye to these things. If it has no value added features and can't even explain where the money is coming from, then, we ought to be skeptical and keep our money far from it.
Posted Using LeoFinance Beta