Users are way under-compensated for the risk

Users are way under-compensated for the risk

Swan Bitcoin CEO Cory Klippsten believes that the liquidity disaster involving Celsius Network could also be simply the starting of a broader collapse in the crypto lending house. 

“It doesn’t matter if you’re an amazing CeFi lending platform, taking these retail deposits and lending them out the back end and giving them yield, or a terrible one, they’re all going to get kind of dragged down,” Klippsten stated in an unique interview with Cointelegraph.

Celsius, a number one crypto lending platform, halted withdrawals earlier this month, citing “extreme market conditions.” Since then, different crypto companies, together with Babel Finance and Three Arrow Capital, have skilled liquidity points.

Klippsten, a hardcore Bitcoin (BTC) maximalist, has been a vocal critic of centralized lending platforms resembling Celsius. 


“Their loan books are opaque, their activities are opaque. […] You’re being way under-compensated for the risk,” he defined. 

Klippsten is sort of skeptical that Celsius will have the ability to absolutely compensate customers who are at present unable to entry their funds on the platform.

“It’s going to be a fight over the scraps, unfortunately, for a number of years,” he predicted.

Klippsten describes Celius as a very stark case of unhealthy risk administration, mentioning that related enterprise practices are frequent in the house and they are going to be quickly focused by regulators. 

Don’t miss the full interview on our YouTube channel and don’t neglect to subscribe!

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