Celsius carried more risk than traditional banks, investor documents show
Cryptographic lending platform Celsius (CEL). According to, it was more risky for users than traditional banks report To The Wall Street Journal Based on investor documents.
Lending platform I have been facing some serious problems over the past month. Freezing withdrawal Even if Facing an investigation From multiple US states.
according to In a document seen by the WSJ, Celsius issued a large loan backed by very little collateral. There weren’t many safety nets in case the market started to go down.
According to the WSJ, the company also made investments that are difficult to release immediately if consumers rush to withdraw money.
As of the summer of 2017, before acquiring additional capital, Celsius had accumulated over $ 19 billion in assets and had approximately $ 1 billion in capital. This will result in a 19: 1 ratio of the company’s assets to equity. This is almost double the average wealth and ratio of all banks in North America, 9: 1, the WSJ reports, citing the following statistics: FactSet.
This ratio serves as an indicator of investor risk, and in companies like Celsius, this ratio is high because some of the assets are in the form of highly volatile cryptocurrencies. This is in contrast to traditional banks, which hold assets in more stable sectors and have access to loans from central banks.
In 2021, Celsius $ 750 million To grow the lending ecosystem from investors. Lending platforms are popular with investors because of their high interest rates, with users earning up to 18.6% annually by depositing cryptocurrencies on the platform and 7.1% on stablecoin. This is much higher than the average interest rate on a savings account. About 0.1%.
However, the company faces some significant challenges this year.Users earlier this month Reported difficulties I’m trying to withdraw funds.There were also rumors of the CEO of Celsius. Trying to escape America.
