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.
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.
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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