Swan Bitcoin Chief executive officer Cory Klippsten believes the liquidity crisis involving Celsius Network might be only the beginning of the broader collapse within the crypto lending space.
“It does not matter if you are an incredible CeFi lending platform, taking these retail deposits and lending them the back finish and providing them yield, or perhaps a terrible one, they are all getting type of pulled lower,” Klippsten stated within an exclusive interview with Cointelegraph.
Celsius, a number one crypto lending platform, stopped withdrawals earlier this year, citing “extreme market conditions.” Since that time, other crypto firms, including Babel Finance and Three Arrow Capital, have observed liquidity issues.
Klippsten, a hardcore Bitcoin (BTC) maximalist, has been a vocal critic of centralized lending platforms for example Celsius.
“Your finance books are opaque, their activities are opaque. […] You are being way under-paid for the danger,” he described.
Klippsten is very skeptical that Celsius can fully compensate users who’re presently not able to gain access to their around the platform.
“It’s likely to be a battle within the scraps, regrettably, for several years,” he predicted.
Klippsten describes Celius like a particularly stark situation of bad risk management, mentioning that similar business practices are typical within the space and they’ll be soon targeted by regulators.
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