White-handed Because Of Sending Cryptocurrencies into Celsius For Interest

A few months ago, Hamish Tipene (Australia) made two mortgages, then deposited them in the Celsius Network, hoping to make more money.

Earlier this year, when he noticed that interest rates on digital platforms were higher than in traditional banking, Tipene decided to take out a mortgage and convert it to cryptocurrency, then deposit the entire amount into Celsius Network. It is one of the world’s most prominent crypto lending and borrowing platforms, with a return of 18%, well above the standard bank savings rate.

But as the value of the money plummeted, Tipene’s collateral narrowed, and he needed more collateral to secure the loan. Otherwise, he would be liquidated. In the middle of it, Celsius Network unexpectedly announced a trading freeze. At the same time, the loan company Tipene activated its payment terms of 0.59 Bitcoins with a value of $11,800. Now he continues to face a new liquidation, which could see $13,000 blown out of the account.

“I tried to approach to negotiate, unlocking the money deposited in Celsius but hopelessly. I haven’t anticipated this situation yet, and it’s hard to figure it out,” Tipene, a carpenter, told Yahoo Finance. “I trusted them and sent my savings, but they’re mistreating me.”

Last year, the money gave small investors like Tipene a significant return and the chance to become rich. But as the tide receded, they were the ones most severely affected. Companies like Celsius, which many investors have chosen for their safety, are now in danger.

Before the incident, the Celsius digital money lending system was always vigorously promoted as “the bank is your enemy” and “the traditional bank will soon disappear”… Millions of people have followed suit. Celsius’s statistics show that, as of May, 1.7 million people were using the platform, with more than $12 billion being deposited the retail investors.

Over the past week, the company has frozen customer accounts pretext of “operational stability.” Yevhenii Marchenko, who lives in Northern California, cannot withdraw the $85,000 or more of Solana, Cardano, and Chainlink funds locked in Celsius. He has been depositing money into the platform since last November when the money market peaked.

“Most of the influencers” YouTube channel on money is proposing Celsius, so I think it’s safe,” Marchenko said. “But now, things are bad, they’re tough, and I’m depressed.”

Meanwhile, Celsius Network has not made moves to protect users besides hiring lawyers to negotiate with the banks where users deposit funds. Meanwhile, hundreds of clients are gathering the evidence to sue the company.

“They are the ones who hold other people’s property but have no collateral. We are almost at the edge of bankruptcy,” said Ben Armstrong, a crypto influencer and client of Celsius. “We may not get a lot of money back, but Celsius needs to be responsible now.”

According to Joshua Browder, CEO of DoNotPay, users can sue Celsius through a representative law firm. According to him, if the company does not declare bankruptcy in the next two months, small investors can get their money back, though not as fully as they initially deposited it.

“Even if Celsius goes bankrupt, claims ranging in size from $10,000 to $25,000 can still be settled in the U.S., depending on state regulations,” Browder said.

However, small investors have thought of the possibility of losing it. Tipene said he could not file a lawsuit in the U.S. nor give up hope of taking his assets due to the lack of external assets to mortgage the loans.

“Bitcoin may go down to $10, but I believe it will go up again in the future. But if you deposited your money on some platform, you may never get it back, “Tipene added.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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