Bad news, honey.
On the long list of terrible things to wake your pregnant wife up with, the news that you’ve lost $100,000 to the Celsius bankruptcy is certainly up there.
Sadly, this is exactly what happened to Celsius user Jack Holcomb, who explained to The Wall Street Journal that he’d taken out a home equity loan to invest $100k worth of alleged stablecoins into the now-embattled crypto lending platform. Celsius wooed its many investors with low-risk, high-yield promises, and Holcomb was expecting to make $7,000 per month in returns.
But like millions of others who trusted their assets to the platform, the sunken Celsius ship has seemingly taken over $4.7 billion of user funds with it — and for folks like Holcomb and his wife, it’s unlikely that they’ll get that money back.
“My family’s not going to starve to death,” he told the WSJ, explaining that he was able to dip into cash savings to pay back the loan. “But losing $100,000 is never fun.”
Led by charismatic cofounder Alex Mashinksy, Celsius quickly rose to crypto prominence with its pro-user, anti-bank messaging. The platform was one of many that embraced the risk-happy language of the now-fraught market, while simultaneously insisting that user money would be safer with them than with regulated, institutional banking. And many amateur investors, Holcomb included, bit at the chance to securely dip their toes — or, well, $100k — into the booming industry.
But back in June, Celsius suddenly halted user transactions, freezing all customer funds. Holcomb, as he recounted to the WSJ, shook his wife awake to tell her the news. (As is any pregnant woman’s right, she simply asked her husband if he was joking and promptly went back to sleep.)
Unfortunately, Holcomb wasn’t joking.
Web3 investors have a reputation for their undying belief in digital assets. The widespread crypto crash, however, has shaken the faith of many forlorn investors — and we can imagine it’s particularly painful for those who chose to trust organizations promising stability and security.
“I’ve never had a bank tell me, ‘I’m sorry, we’re not allowing you to withdraw your money,'” Dave Jachelski, who invested several thousand dollars into similarly defunct lender Voyager, told the WSJ. “Sometimes things are too good to be true.”
READ MORE: They Thought ‘Crypto Banks’ Were Safe, and Then Came the Crash [The Wall Street Journal]
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