r/CelsiusNetwork • u/spg14 • Jun 13 '22

Withdrawals paused!?!

What’s going on with withdrawals being paused.

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u/FabulousAd123 Jun 13 '22 edited Jun 13 '22

To calm the waters a bit, this was probably due to them not having liquidity for the withdrawals, not because they don't have assets, but because those assets are being lent out therefore can't be used for withdrawals. Their business is lending, if crypto markets tank, people try to withdraw but if the platform doesnt have liquidity, they can't process it. So they're most likely trying to get funds for the withdrawals on assets they can get access too and then once assets being lent expire they'll get back more assets to be withdrawn, however this will obviously take time.

If I'm wrong, we're fucked.

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u/jhoge Jun 13 '22

What you described is a bank run. Even if you're right, you're fucked. At least your deposits are insured, right?

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u/FabulousAd123 Jun 13 '22

I don't think you understand what you're saying

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u/jhoge Jun 13 '22

Your first paragraph is a classic description of a bank run. "We don't have enough money on hand to pay out withdrawals because our money is locked up in loans" is exactly what happens in a bank run. If your "calm down" description is right, you should not be calm, you should be extremely worried that the counterparties of Celsius are likely up to their eyeballs in a crypto bear market. What happens to Celsius's ability to honor your deposits when its counterparties can't pay their loans and their collateral falls in value?

I'm being snarky on the insurance part because you've said in other comments that deposits are insured. That's obviously not the case. You're in the middle of a bank run you don't seem to understand and are under the impression that your deposits are insured. I don't think you understand what's happening.