Swan Bitcoin CEO vs. Crypto Lenders: Users Are Well Undercompensated for Risk


Swan Bitcoin CEO Cory Klippsten believes the liquidity crunch involving Celsius Network could be just the start of a broader meltdown in the crypto lending space.

“It doesn’t matter if you’re an amazing CeFi lending platform, taking those retail deposits and lending them out the back and giving them a return, or a terrible return, they’re all going to be somehow driven down,” Klippsten said in an exclusive interview with TSWT.

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Celsius, a leading crypto lending platform, halted withdrawals earlier this month, citing “extreme market conditions.” Since then, other crypto companies, including Babel Finance and Three Arrow Capital, have experienced liquidity issues.

Klippsten, a hardcore Bitcoin (BTC) maximalist, has been a vocal critic of centralized lending platforms such as Celsius.

“Their loan books are opaque, their business is opaque. […] You are well undercompensated for the risk,” he explained.

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Klippsten is quite skeptical about Celsius’ ability to fully compensate users who currently cannot access their funds on the platform.

“It’s going to be a fight for leftovers, unfortunately, for a number of years,” he predicted.

Klippsten describes Celius as a particularly stark case of risk mismanagement, pointing out that similar business practices are common in the space and will soon be targeted by regulators.

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