Critics accuse the crypto ecosystem of promoting tokens with little or no inherent value, making them highly speculative assets that are ripe for swift falls when market sentiment sours, along with bank-run style exoduses on the platforms that support them.
Believers, meanwhile, insist that crypto systems will allow finance to be decentralised, helping to protect consumers from banks amid other boons over the long term.
Celsius has previously adopted a dismissive approach to sceptics. It released a statement less than a week ago, on June 8, entitled, “Damn the Torpedoes, Full Speed Ahead.”
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"At this already challenging time, it’s unfortunate that vocal actors are spreading misinformation and confusion," the statement read. "They have tried unsuccessfully, for example, to link Celsius to the collapse of Luna and falsely claim that Celsius sustained significant losses as a result."
The Terra/Luna project, along with a lending protocol called Anchor, was supposed to be a safe way for users to earn large interest rates because it contained a “stablecoin” that was meant to be exchangeable for US dollars at a one-to-one rate. When that peg was broken by large sell-offs, users panicked and fled, resulting in a bank-run style situation that caused hyperinflation of another token and the ultimate devaluation of the whole project.
By 5am AEST on Tuesday, Celsius’ own crypto token was down about 25 per cent for the day, making it worth about 33 US cents, though it had gone as low as 60 per cent. A year ago, it was worth more than $US7.
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