Members of the crypto community on Twitter have been left bewildered by the beleaguered Celsius Network continuing to pay weekly rewards despite pausing withdrawals two weeks ago.
As previously reported, crypto lending platform Celsius paused withdrawals on June 13 after citing extreme market conditions amid the current bear market. Reports soon followed that the firm was undergoing liquidity issues and may be heading toward insolvency, potentially putting users’ funds at risk.
Why is @CelsiusNetwork still paying rewards if apparently they are talking bankruptcy? Why not pause rewards and set a low withdrawal limit? Is it me or does that make too much sense?
— Crypto V (@crypto_kid2021) June 27, 2022
Figures such as Simon Dixon, Bitcoin (BTC) OG and CEO and co-founder of online investment platform BnkToTheFuture, tweeted his bewilderment to his 59,300 followers on Monday over receiving nearly $4,000 worth of crypto rewards but being unable to withdraw them:
“Email on one of my accounts. Can’t withdraw but @CelsiusNetwork is still paying out. I’m curious if you think the rewards should still be coming? Thoughts?”
Upon searching “Celsius still paying” on Twitter, there are countless users raising questions over the lending platform, with some such as CryptoStylesUSA calling it “insulting” that Celsius continues to pay weekly rewards while keeping their “crypto hostage.”
— CryptoSteve.eth (@CryptoStylesUSA) June 27, 2022
According to Celsius’ website — which is currently undergoing revamp due to the liquidity issues — the company is still advertising annual percentage yields (APYs) of up to 18.63% on crypto deposits, which many have argued is unsustainable.
Synthetix (SNX), the native token from the decentralized finance (DeFi) platform Synthetix, is the only asset this promotion offers at the time of writing. The top tier stablecoins on Celsius have roughly a 9% APY listed, while Polkadot (DOT) and Polygon (MATIC) have offered APYs as high as 11.87% and 9.52% apiece.
Celsius also appears to be still offering 10% rewards on first deposits up to $250,000, despite currently not allowing users to withdraw from the platform.
While it is still uncertain what the exact fate of funds belonging to Celsius users will be, the firm reportedly onboarded advisers from a management consulting firm in advance of the company possibly facing bankruptcy. Celsius also hired lawyers on June 14 to help restructure the company amid its financial woes.
On Monday, rumors started circulating that Celsius CEO Alex Mashinksy allegedly attempted to leave the country via Morrison Airport in New Jersey but was stopped by authorities. It appears the story originated from crypto analyst Mike Alfred; however, the firm has reportedly denied the accusations.