“In every meaningful way – from the descriptions of Celsius’s contracts with its clients to the risks it took with their crypto assets – the way Celsius conducted its business was very different from what Celsius told its customers,” Pillay writes. According to her, the company presented itself as a platform for crypto loans that is controlled by the community and is able to provide high returns – but it soon became clear to her that she was not really able to provide such high returns.
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Instead of updating its claims and lowering the unrealistic interest rates it had promised, it began resorting to crooked tactics, not to mention inclusive, to pay interest to those who tried to withdraw their money. Long before the collapse of the tera currency pair in May 2022, which was the straw that led to the company’s bankruptcy, it was already in serious trouble. Pillay found that “Celsius’ problems didn’t start in 2022. Serious problems started no later than 2020, after Celsius started using user funds to fund operating expenses and grants.”