Chaos in the crypto market. this past monday, several cryptocurrency platforms announced the temporary cessation of their operations, preventing investors from withdrawing funds or making any type of movement. Wow, what we all know as ‘financial corral’.
This caused a sharp drop in the price of Bitcoin, the quintessential crypto, to fall below $24,000, a low of 18 months ago. A new setback for a market that since the beginning of the year has been suffering the consequences of the economic situation.
The investors run away from crypto looking for safer values. And what has happened with these platforms, specifically, Celsiusdoes not help to regain confidence.
Celsius, precisely, has captured all eyes, because is suspected of pyramid scam. In fact, its financial director, Yaron Shalem, was arrested by the Israeli police accused of money laundering and fraud.
On Monday was the first to announce the suspension of withdrawals, exchanges and transfers between accounts in the operations of its clients. I was driving a turnover of 20,000 million of dollars in crypto assets and several US agencies had already warned that it could be a pyramid scam. A mixture of the new and the old school of fraud. Let’s get to know her a little more.
Taking advantage of the lack of market legislation
Celsius is a typical decentralized money lending firm in the cryptocurrency sector. Anyone can register and request a loan, yes, since it is a market without legislation, it is very easy to leave without repaying that loanso that we understand each other.
The firm lured investors by promising high returns on cryptocurrencies like the 6.25% he paid for Bitcoin or the 6% in Ethereum. And although he promises that he does not use the cryptocurrencies of his clients to carry out operations, it seems that the thing has not been like that.
In fact, it has had to go from the United Kingdom to the United States because the suspicions about its activity were already too flagrant. All the collapse of these days it was due to the blocking of a token pegged to the ETH of Ethereum. Something that has taken the firm ahead and also collaterally affected Binance.
The latter is about of the largest platform for buying and selling virtual currencieswhich allows the tokens to be exchanged for euros or dollars, which also had to stop its activity, although it has already resumed.
Therefore, we see how a pyramid scheme, from the oldest of the financial markets, is putting the new market of virtual currencies in check. What is going to have more effects than we think
More fuel to the fire for the global economic crisis
We say this because this crypto market crash is going to drag many people down. He already has. The cryptocurrency platform coinbase fired by email -eye, it may be a new trend- almost a fifth of its workforce, about 1,100 people.
According to its CEO, that as soon as that email was sent to the workers where they were informed of the dismissal, they cut off their access to it, this ‘regulation of the workforce’ is due to the uncertainty of the market since it grew too fast in times of expansion . That is, he recognizes the bubble that he has planned on this market and that is bursting right now.
In them is the loan signature in cryptocurrencies BlockFiwhich has admitted that it is cutting staff, also about 20%.
A few weeks ago this market already gave a warning with the collapse of stablecoins (cryptocurrencies in theory more stable and not linked to the swing) moon and earth, which practically disappeared in hours.
Now it is in an unprecedented crisis that will have many victims who will not be able to be compensated. The lack of regulation and support of the virtual financial market is going to have consequences in one of the worst moments. We will keep reporting.