Several “crypto hedge funds” have been rumored to be insolvent as they were exposed to digital currency prices via leverage, and somewhat linked to other companies that all have issues simply because the prices fell.
Celsius Network claimed that the freeze was in the interest of its customers, but regulators in Texas, Kentucky, New Jersey, and even the Securities and Exchange Commission are not taking their word.
Joshua Henslee released a video sharing his thoughts on why a second major crash in the digital currency sector is happening and why he thinks we’re entering a longer-term bear market.
The announcement follows reports over the past few days that the Celsius Network had been borrowing millions of dollars worth of USD stablecoins (USDC and USDT) to cover withdrawals.
Lido Staked Ethereum (stETH) has lost its peg to Ethereum (ETH), and the price of the Celsius Network token ($CEL) has plummeted 35% on the day—and 91% on the year—as of press time.
The digital asset lending company recently updated its risk disclosure to point out that aside from lost keys and stolen coins, regulators are now a risk.
News reports have emerged that solidify arrest rumors surrounding Celsius Network CFO Yarom Shalem in Tel Aviv, allegedly in relation to investor fraud worth tens of millions of U.S. dollars.
Tether has provided a loan to Celsius Network and was the lead investor in a US$30 million funding round in 2020 for the so-called “cryptocurrency bank.”
New York’s attorney general has joined Kentucky, New Jersey and Alabama authorities in launching an attack on digital currency lending platforms, with sights set on Celsius and Nexo.
Kentucky has joined New Jersey, Alabama and Texas in booting out digital currency lender Celsius Network, issuing a cease-and-desist order against the firm.
