SAD_
Autopsy report

Celsius

CEL | Lending
InsolvencyDied Jun 2022

Celsius promised depositors high yields, then put customer assets into illiquid positions including staked ETH. When withdrawals surged in June 2022 it froze accounts, and it filed for bankruptcy the following month.

Missed warning signs
  1. 1-1.5y
  2. 2-6mo
  3. 3-3mo
  4. XDeath

Spacing is ordinal, not to scale. Numbers match the list below.

  1. 1

    Advertised yield had no matching low-risk source at that rate.

    Visible 1.5 years before death | Yield with no source

    Reuters

  2. 2

    The CEO was alleged to have sold CEL while promoting it to depositors.

    Visible 6 months before death | Insiders selling

    APReuters

  3. 3

    A large staked-ETH position could not be sold quickly without heavy slippage.

    Visible 3 months before death | Thin liquidity

    CoinDesk

The lesson

A yield you cannot trace to a source is a liability being repackaged.

Sources
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Editorial summary of public reporting. Allegations are labeled as allegations. Not financial or legal advice.

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