The despair of those who believe in 'crypto banks'

 One Sunday evening in June, Lucas Holcomb hurriedly woke his pregnant wife: "Honey, we just

Holcomb, 34, an American, deposited all of his savings into Celsius Network - a platform that allows users to deposit cryptocurrencies and earn interest like a traditional bank, but with an interest rate of up to 18-20% per year. Celsius is a big name in the cryptocurrency space, so he believes there won't be any big problems.

But Holcomb was wrong. Last month, when the cryptocurrency market was reeling, Celsius suddenly announced the freezing of all accounts on the platform. Users, including Holcomb, cannot withdraw or do anything with their funds. His savings were "locked up".

By the beginning of this month, Celsius filed for bankruptcy, which means billions of dollars of those who have put their trust in the "no date" platform. They also learned the lesson that is common when participating in the financial markets: high returns come with great risks. For the cryptocurrency sector, the risk is even higher, even being likened to a casino because of the lack of regulatory and legal oversight.

Before the crash, Celsius was one of the world's largest and most influential crypto lenders and borrowers. Like banks, these emerging platforms take deposits and give customers monthly interest, mostly in stablecoins like USDT or USDC. For example, Celsius supports users to deposit USDC with an interest rate of 7% and can withdraw at any time to convert into USD.

In the bankruptcy filing, Alex Mashinsky, the founder of Celsius, said the company owes users a total of $4.7 billion. He admits it is not possible to repay the money to those who have trusted the platform.

Holcomb expects to earn $7,000 per year from a $100,000 worth of stablecoins deposited in Celsius. But when he talked about the account being frozen, the wife exclaimed: "Are you joking?".

Holcomb stayed up all night, trying to withdraw money from Celsius but in vain. The next day, the 34-year-old turned to prayer. Then he had to accept the loss of money. "My family is not starving, but how can we be happy to lose up to 100,000 USD," he pensively.

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