Yet Celsius claims to be profitable on this by “rehypothecating” the collateral.
Less than what they pay back to their “investors” ( 10-12.68%). The interest rate for these loans is between 1% to 8.95%. It is possible for customers to take out USD stable coin loans from Celsius, under the condition that they provide a Bitcoin or Ethereum collateral of at least twice the value of the loan. In other words: Is Celsius lending money to itself? 2. While Celsius's CEO Alex Mashinsky has assured that these loans are fully collaterized, his former CFO - the actual one is suspended after having been arrested a few weeks ago on fraud and money laundering charge - has stated that this is not the case ( Source).Īlso it is unknown what the collateral exactly is nor if these institutions could be a related entity. Institutional borrowersĪccording to Celsius most of its income comes from institutional borrowers paying between 7 to 15% interest ( Source)Ĭelsius has never revealed the name of a single of these institutions nor their creditworthiness. "Banks are not your friends", "Banks generate those yields but they keep it all for themselves", "We give back 80% of what we make back to the community", "When I was a child banks used to also give you 10%, now they have figured out that they don't need to", "If you look at their earnings report you will see that they also make 10% ROI per year", "We are the real robinhood".Ī classic Ponzi narrative… So, how does Celsius generate these yields?Ĭelsius is very vague when asked to explain how they magically create double digit returns, but they have repeatedly evoked these 4 methods : 1. When asked how Celsius outcompetes traditional finance their answer often includes:
8% APY if you invest in CCC rated junk bonds. The obvious question everyone should ask theirselves, is how can Celsius achieve such high yields when at the same time you get around: Sounds too good to be true? It certainly is! Celsius outcompetes traditional finance by a factor 20x to 100x Its flagship product: 10 to 12.68% annual returns on USD stable coins and this with little to no risks. Additionally, Arbinet’s fundraising story was featured as a case study in 2001 by Harvard Business School.With over $20b in assets under management Celsius Network is the biggest centralised lending platform in the crypto space. Alex founded two of New York City’s top 10 venture-backed exits since 2000: Arbinet, with a 2004 IPO that had a market capitalization of over $750 million and Transit Wireless, valued at $1.2 billion.Īlex has received numerous awards for innovation, including being nominated twice by E&Y as ‘Entrepreneur of the Year’, in 2002 & 2011 Crain’s 2010 Top Entrepreneur the prestigious 2000 Albert Einstein Technology medal and the Technology Foresight Award for Innovation (presented in Geneva at Telecom 99).Īs one of the pioneers of web-based exchanges, Alex authored patents that cover aspects of the Smart Grid, ad exchanges, Twitter, Skype, App Store, Netflix streaming concept and many other popular web companies.
#ALEX MASHINSKY LICENSE SERIAL#
Over 35 patents have been issued to Alex, relating to exchanges, VOIP protocols, messaging and communication.Īlex is a serial entrepreneur and founder of seven New York City-based startups, raising more than $1 billion and exiting over $3 billion. Alex is one of the inventors of VOIP (Voice Over Internet Protocol) with a foundational patent dating back to 1994 and is now working on MOIP (Money Over Internet Protocol) technology.
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