Alex Mashinsky, the CEO of Celsius, has finally broken his silence three days after the company announced that it was pausing withdrawals. He tweeted that the Celsius Network team is working non-stop.
Mashinsky told users that the crypto lender is focused on their concerns. He said it’s a clear sign that their community is the strongest as it came together. He acknowledged that its “a difficult moment”. Mashinsky urged patience and support. But this offered little to no comfort to those who have been wanting answers. One user highlighted that he had 45 ETH which he was saving for his new house. But now its stuck and he is worried that he will not be able to withdraw it. The user added that it had taken him four years and 100 hours every week to save 45 ETH. He urged Celsius Network to not let him down.
stETH is pegged to ETH’s value and has been often used as collateral on platforms like Celsius for borrowing ETH. Recently, stETH lost its peg to the heavily fluctuating ETH. Celsius would have to sell off its stETH stores in order to enable its users to withdraw. And if the users withdrew, it would force Celsius to sell off huge portions of its $472 million stETH supply. This would further lower stETH’s price and leave the company with insufficient liquidity to cover its ETH obligations to the customers.
So it’s very much unclear how Celsius would come out of this problem. The crypto lender has also hired attorneys to help restructure the company.