The CEO of Swan Bitcoin, Cory Klippsten, criticizes Celsius Network and different centralized crypto lending platforms, informing of imaginable marketplace contagion.
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Swan Bitcoin CEO Cory Klippsten believes that the liquidity situation involving Celsius Network whitethorn beryllium conscionable the opening of a broader illness successful the crypto lending space.
"It doesn't substance if you're an astonishing CeFi lending platform, taking these retail deposits and lending them retired the backmost extremity and giving them yield, oregon a unspeakable one, they're each going to get benignant of dragged down," Klippsten said successful an exclusive interrogation with Cointelegraph.
Celsius, a starring crypto lending platform, halted withdrawals earlier this month, citing “extreme marketplace conditions.” Since then, different crypto firms, including Babel Finance and Three Arrow Capital, have experienced liquidity issues.
Klippsten, a hardcore Bitcoin (BTC) maximalist, has been a vocal professional of centralized lending platforms specified arsenic Celsius.
"Their indebtedness books are opaque, their activities are opaque. [...] You're being mode under-compensated for the risk," helium explained.
Klippsten is rather skeptical that Celsius volition beryllium capable to afloat compensate users who are presently incapable to entree their funds connected the platform.
“It’s going to beryllium a combat implicit the scraps, unfortunately, for a fig of years,” helium predicted.
Klippsten describes Celius arsenic a peculiarly stark lawsuit of atrocious hazard management, pointing retired that akin concern practices are communal successful the abstraction and they volition beryllium soon targeted by regulators.