After one week of pausing user withdrawals, swaps and transfers, the firm said it was maintaining an open dialogue with regulators and officials and plans to continue working with them regarding this pause. Celsius has yet to comment on when the company is going to stabilize its operations. Celsius has also paused communications on Twitter Spaces and ask-me-anything (AMA) sessions “to focus on navigating these unprecedented challenges.”
Although Celsius has refrained from communication, media and social media have been buzzing with news and speculation going on around the past, present and future of the company. One of the most interesting developments is a community-led Gamestop-style short squeeze.
The dust from the Terra debacle hasn’t yet settled and but another crisis is shaking up crypto markets. The multi-billion-dollar crypto lending and staking platform Celsius is the latest crypto company to be beset by controversy.
Earlier anomalies
Celsius’ tagline is, “An economy where financial freedom doesn’t come with a price tag.” This marketing tagline, although unbelievable for some, was truly effective for some time. Since opening its doors in 2017, the company had roped in over $25 billion in crypto over five years until things came to a head on June 12, 2022, when the company paused user withdrawals.
However, signs of Celsius’ mismanagement of funds were visible prior to this instance. In December 2020, during the $120 million BadgerDAO hack, Celsius reportedly lost over $50 million worth of crypto, making them the largest single victim of the act. To recompense victims for their losses, BadgerDAO enforced a restitution plan by creating the remBADGER token.
Token holders were assured a payout in remBADGER over the next two years that would cover the remainder of the loss. This assurance came with only one requirement: The remBADGER must remain within the Badger vault. If the token were to be withdrawn, all future repayments would be forfeit. However, on March 18, 2022, Celsius withdrew all of its allotted remBADGER, worth roughly $2.1 million at the time of the transaction.
When Celsius Network realized its mistake, it tried to convince the Badger team to allow it to re-deposit in violation of the rules set forward by the BIP-80 resolution. Unfortunately, for Celsius, the BadgerDAO took the code is law ethos earnestly, and the proposition was voted down.
Many users have also been concerned about the firm’s leadership. Celsius…
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