The crypto lending provider’s Celsius network is in the midst of a big storm which threatens the very survival of the ecosystem. Its digital token CEL fell around 20% on Friday amid growing concern over the sustainability of the high yields on offer, especially after the collapse of the Terra blockchain.
According to its website, the CEL token promises “real financial rewards”, up to 30% additional returns per week. It is unclear what triggered the latest decline,
Since Terra’s failure, demand for high-yield loan protocols has taken a hit. Additionally, there were fears Celsius could meet a similar fate, which the company acknowledged but earlier said it was able to avert Terra’s crisis early on.
In a statement to Bloomberg, the platform then said that the price is often affected by market factors that are unrelated to company performance.
“Looking at the entire crypto sector, we are definitely in a crypto winter. The price of all cryptocurrencies has clearly been affected by a general market downturn. We are squarely focused on long-term construction,” the statement said.
Despite the assurance, speculation continued to grow about the cash-strapped Celsius Network and its eventual demise. Finally, the platform’s founder took to Twitter to appease panicked investors.
Celsius CEO slammed trolls for spreading FUD
Alex Mashinsky, CEO of Celsius called denounced trolls for spreading FUD and urged the community to unite and win. That said, rumors of liquidation are not new.
In May 2022, Mashinsky attributed the instability of crypto projects in the context of the Terra fallout to “Wall Street sharks” and believed someone was targeting the company.
“It’s not a coincidence. It was someone who decided, ‘You know what? I’m going to destroy everything Celsius,’ he said at an event. When asked who could be the culprit, he clarified that it had “nothing to do with regulation. Just short sellers looking for weakness.”
He then added that the sell-offs on the Celsius platform that have happened in the past have caused people injury, but he claimed that he personally lost more than anyone else.