Three days after Celsius crypto lender abruptly announced that it was suspending all customer withdrawals, exchanges and transfers, the embattled company’s CEO, Alex Mashinsky, has finally broken his silence on the matter.
But Mashinsky offered little comfort to those hoping for answers as to when users will be able to withdraw funds again.
Mashinsky took to Twitter this afternoon, speaking publicly for the first time since his company froze withdrawals on Sunday evening, to assure the Celsius community that the company’s team is “non-stop” working on the problem and to ask customers to continue to be patient.
@CelsiusNetwork the team works non-stop. We are focused on your concerns and grateful to have heard from so many people. Seeing you come together is a clear sign that our community is the strongest in the world. It is a difficult time; your patience and support means the world to us.
Notably, Mashinsky gave no response as to when he is aiming or expecting Celsius to work again. Shortly after, Twitter users pleaded with the beleaguered CEO for commitments to secure customer deposits, but Mashinsky did not respond further.
Please don’t let me down, I don’t mind waiting for my either. I had 45 ETH that I was saving for my new house. I cry and pray to God that I can withdraw this money. It took 4 years and me working 100 hours a week to save I can not sleep
Celsisus suspended withdrawals on Sunday for “stabilize liquidity” and “preserving and protecting assets” after a particular cryptocurrency offered on the platform, Lido’s Staked Ether (stETH), began to experience irregularities.
stETH, which represents Ethereum locked to the Ethereum 2.0 beacon chain (which will eventually merge with the Ethereum mainnet) is supposed to be pegged to the value of ETH. For this reason, stETH is often used as collateral on platforms like Celsius to borrow ETH.
But, as other crypto markets crashed, stETH recently lost its peg to the highly fluctuating ETH. For clients to withdraw ETH, Celsius would sell its stETH stores. Should a large number of customers concerned about the recent depegging decide to pull out, such an event would force Celsius to sell massive portions of its $472 million stETH supply. This would further reduce the price of stETH and almost certainly leave the company with insufficient liquidity to cover its ETH obligations to customers.
It is unclear how Celsius will solve the problem if stETH remains unlinked from ETH (at the time of writing, stETH is currently trading at 0.93 ETH). Today the company reportedly hired lawyers to review corporate restructuring if other sources of funding cannot be found.
On Sunday, news of the withdrawal freeze sent the native Celsius token 70% drop in one hour. Just a day before, Mashinsky tweeted much more generously, lambasting a Twitter user for spreading “fear, uncertainty and doubt” when he cited rumors of retail investors being banned from Celsius accounts:
Mike, do you know at least one person who has trouble withdrawing from Celsius?,
why spread FUD and misinformation.
If you get paid for this, let everyone know you choose your side, otherwise our job is to fight Tradfi together…