Members of the crypto community on Twitter have been left baffled that Celsius Network is still paying out weekly rewards despite pausing withdrawals two weeks ago.
As previously reported, the cryptocurrency lending platform Celsius halted the withdrawals on June 13 after citing extreme market conditions amid the ongoing bear market. Shortly thereafter it was reported that the company was experiencing liquidity problems and could be heading towards insolvency, potentially putting user funds at risk.
Why is @CelsiusNetwork still paying rewards if apparently they are talking about bankruptcy? Why not pause rewards and set a low withdrawal limit? Is it me or does that make too much sense?
— Crypto V (@crypto_kid2021) June 27, 2022
Shortly thereafter it was reported that the company was experiencing liquidity problems and could be heading towards insolvency, potentially putting user funds at risk.
Figures like Simon Dixonbitcoin (BTC) bull and CEO and co-founder of online investment platform BnkToTheFuture, tweeted on Monday his bafflement to his 59,300 followers for receiving nearly $4,000 in cryptocurrency rewards but not being able to withdraw them:
“I received this email on one of my accounts. I can’t withdraw my money, but @CelsiusNetwork is still paying rewards. I’m curious if you think the rewards should keep coming…Opinions?”
Searching for “Celsius is still paying” on Twitter, there are countless users raising questions about the lending platformwith some, like CryptoStylesUSA, calling it “insulting” that Celsius continues to pay out weekly rewards while holding their “cryptocurrencies hostage.”
This is honestly insulting, @CelsiusNetwork is still paying weekly rewards while holding my crypto hostage. pic.twitter.com/Cst0iqNkDc
— CryptoSteve.eth (@CryptoStylesUSA) June 27, 2022
This is honestly insulting, @CelsiusNetwork keeps paying out weekly bounties while holding my crypto hostage.
According to the Celsius website -which is currently undergoing a renovation process due to liquidity problems- the firm continues to advertise annual percentage yields (APYs) of up to 18.63% on crypto deposits, which many have argued is unsustainable.
Synthetix (SNX), the native token of decentralized finance (DeFi) platform Synthetix, is the only asset offering this promotion at the time of writing this article. The top-tier stablecoins on Celsius have roughly 9% APY listed, while Polkadot (DOT) and Polygon (MATIC) have offered APYs as high as 11.87% and 9.52% each.
Celsius also appears to continue to offer 10% rewards on first deposits of up to $250,000, despite not currently allowing users to withdraw money from the platform.
Although the exact destination of the funds belonging to Celsius users is not yet known, it has been reported that the company has hired consultants of a management consulting company before the company faces bankruptcy. Celsius also hired lawyers on June 14 to help restructure the company amid its financial troubles.
On Monday, rumors began to circulate that Celsius CEO Alex Mashinksy allegedly attempted to leave the country via Morrison Airport in New Jersey but was detained by authorities. It seems that the story originated cryptanalyst Mike Alfred; however, the company has denied the allegations.
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