Crypto loan provider Celsius network is in the middle of a big storm that is threatening the very survival of the ecosystem. Its digital token CEL fell by about 20% on Friday amidst growing concern over the sustainability of the high yields being offered especially after the collapse of the Terra blockchain.
According to its website, the CEL token promises “actual financial rewards,” as much as 30% extra returns weekly. It is unclear what triggered the latest decline,
Since Terra’s failure, demand for high-yielding lending protocols has taken a hit. Also, there were concerns that Celsius might meet a similar fate, which the firm acknowledged but said earlier it was able to avert Terra’s crisis early on.
In a statement to Bloomberg, the platform then said that the price is often affected by market factors that are not related to the company’s performance.
“Looking across the entire crypto sector, we are undoubtedly in a crypto winter. The price of all cryptocurrencies has clearly been affected by a general market downturn. We are squarely focused on building for the long-term,” the statement read.
Despite the assurance, speculation continued to grow about Celsius Network running out of liquid funds and its eventual demise. Finally, the platform’s founder took to Twitter to pacify panic investors.
Celsius CEO Slammed Trolls For Spreading FUD
Celsius CEO Alex Mashinsky called out the trolls for spreading FUD and urged the community to unite and win. That said, the rumors of liquidation are not recent.
Back in May 2022, Mashinsky attributed the instability of crypto projects in the backdrop of Terra’s fallout to “the Sharks of Wall Street” and believed someone was targeting the firm.
“This is not a coincidence. This is somebody who decided, ‘You know what? I’m going to take down all of Celsius,’” he said during an event. When asked who might be the culprit, he clarified that it’s ”nothing to do with regulation. Just short-sellers looking for weakness.”
He then added that the liquidations on the Celsius platform that occurred in the past caused people to get hurt, but he claimed that he personally lost more than anyone.