Celsius’ weekly rewards leaves crypto community confused

Published On: June 29, 2022Categories: Alternative Investments1.5 min read

On June 13, the crypto lending platform paused withdrawals citing extreme market conditions amid the current bear market

The crypto community on Twitter has been left bewildered by the beleaguered Celsius Network continuing to pay weekly rewards despite pausing withdrawals two weeks ago.

On June 13, the crypto lending platform paused withdrawals citing extreme market conditions amid the current bear market. Reports soon followed that the firm was undergoing liquidity issues and may be heading toward insolvency, potentially putting users’ funds at risk.

Figures such as Simon Dixon, Bitcoin (BTC) OG and CEO and co-founder of online investment platform BnkToTheFuture, tweeted his bewilderment to his followers on Monday over receiving nearly $4,000 worth of crypto rewards but being unable to withdraw them: Upon searching ‘Celsius still paying’ on Twitter, there are countless users raising questions over the lending platform, with some such as CryptoStylesUSA calling it ‘insulting’ that Celsius continues to pay weekly rewards while keeping their ‘crypto hostage.’

According to Celsius’ website — which is currently undergoing revamp due to the liquidity issues — the company is still advertising annual percentage yields (APYs) of up to 18.63% on crypto deposits, which many have argued is unsustainable.

Synthetix (SNX), the native token from the decentralized finance (DeFi) platform Synthetix, is the only asset this promotion offers currently. The top tier stablecoins on Celsius have roughly a 9% APY listed, while Polkadot (DOT) and Polygon (MATIC) have offered APYs as high as 11.87% and 9.52% apiece.

Celsius also appears to be still offering 10% rewards on first deposits up to $250,000, despite currently not allowing users to withdraw from the platform.

The firm has reportedly onboarded advisers from a management consulting firm in advance of the company possibly facing bankruptcy. Celsius also hired lawyers on June 14 to help restructure the company amid its financial woes.

On Monday, rumours started circulating that Celsius CEO Alex Mashinksy allegedly attempted to leave the country via Morrison Airport in New Jersey but was stopped by authorities. The story appears to have originated from crypto analyst Mike Alfred; however, the firm has reportedly denied the accusations.

About the Author: Jonathan Adams

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