As many people know, crypto lending company Celsius suspended withdrawals from its platform late Sunday night. I documented what I have been calling “The Mashinsky Moment” in a blog post published late last night.
Celsius wrote in a “Memo to the Celsius Community”:
Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts. We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.
The post continued:
Acting in the interest of our community is our top priority. In service of that commitment and to adhere to our risk management framework, we have activated a clause in our Terms of Use that will allow for this process to take place. Celsius has valuable assets and we are working diligently to meet our obligations.
The company said it is taking the action to “stabilize liquidity and operations”.
Late Sunday night I also discussed the implosion with my good friend Peter Schiff in a one hour and thirty minute long Twitter spaces event.
You can listen to my entire conversation with Peter at this link or you can click on this tweet and access the embedded audio:
Recall, it was just about six months ago when I wrote an article about some of the absolutely batshit insane statements made by Celsius CEO Mashinsky while debating Peter Schiff on the merits of crypto versus gold.
1) Thanks for hammering this nail; it needs it. Mashinsky is a clear bad actor. I'm not always a fan of Peter, but he was right on the money here. I've dealt with yield producing crypto firms; the ones I dealt with never tried to snow job the customer with the 'dividend' narrative. They were very clear about how the yield was produced, and adjusted their rates as the market conditions and capital changed.
2) Unfortunately, what I've learned is that in the modern US financial markets, the profitable take is not to avoid it, but to get in on the first 6 months and then hit the eject button and never look back, poor long term suckers or not.
Last) My worry is that eventually, we go from not enough water in the regulatory toilet bowl to flush the turds, to overflowing turds and 'upper deckers' from the regulatory toilet bowl. Things weren't perfect in past eras, but it seemed like there was a little more 'flush courtesy' and better plumbers on the job. It's like I learned a long time ago...this is why we can't have nice things.
Hey Chris, any chance of releasing the audio on the QTR Podcast? It’s a ton easier to listen to it that way.
Not sure if I can swing it. For now it's here: https://twitter.com/QTRResearch/status/1536214678849863681?s=20&t=NP3iQNUzamc_U-1p4y9rzg
Your discussion with Peter Schiff was excellent. One of your best.
1) Thanks for hammering this nail; it needs it. Mashinsky is a clear bad actor. I'm not always a fan of Peter, but he was right on the money here. I've dealt with yield producing crypto firms; the ones I dealt with never tried to snow job the customer with the 'dividend' narrative. They were very clear about how the yield was produced, and adjusted their rates as the market conditions and capital changed.
2) Unfortunately, what I've learned is that in the modern US financial markets, the profitable take is not to avoid it, but to get in on the first 6 months and then hit the eject button and never look back, poor long term suckers or not.
Last) My worry is that eventually, we go from not enough water in the regulatory toilet bowl to flush the turds, to overflowing turds and 'upper deckers' from the regulatory toilet bowl. Things weren't perfect in past eras, but it seemed like there was a little more 'flush courtesy' and better plumbers on the job. It's like I learned a long time ago...this is why we can't have nice things.
Do you know much about Voyager? They have been paying yields as well.
Looks like my post was swyftly deleted....