Customers Loose Billions? ? - Explaining Crypto Lending Meltdown

The Part Time Economist

People who believed that cryptocurrency is more secure, decentralized, and trustworthy than the existing financial system were in for quite a surprise this week when crypto lending platform Celsius announced that it would temporarily block customers from withdrawing their own funds. Wasn't the entire purpose of crypto to make sure that people were protected from financial institutions abusing their funds? In this post, I'll explain that although cryptocurrency itself does have advantages over traditional finance with regards to being permissionless, decentralized, and more secure, many of those advantages are lost when crypto is deposited with a third-party custodian. As always, this is not advice and is not an endorsement or disendorsement of any company. It is merely designed to show how the advantages of crypto are mitigated when it is used as a traditional asset. #crypto #celsius #cryptocurrency

Note: It is possible that this situation may be resolved by the time you are watching the video.

References

https://arstechnica.com/tech-policy/2022/06/cryptocurrency-plunges-as-crypto-bank-celsius-suspends-withdrawals/

https://blog.celsius.network/a-memo-to-the-celsius-community-59532a06ecc6