# Celsius Network By [judimenko](https://paragraph.com/@clever-crypto) · 2023-03-01 --- **Celsius Network LLC** is a bankrupt [cryptocurrency](https://en.wikipedia.org/wiki/Cryptocurrency) lending company. Headquartered in [Hoboken, New Jersey](https://en.wikipedia.org/wiki/Hoboken,_New_Jersey), Celsius maintained offices in four countries and operated globally. Users could deposit a range of cryptocurrency [digital assets](https://en.wikipedia.org/wiki/Digital_asset), including [Bitcoin](https://en.wikipedia.org/wiki/Bitcoin) and [Ethereum](https://en.wikipedia.org/wiki/Ethereum), into a Celsius wallet to earn a percentage [yield](https://en.wikipedia.org/wiki/Yield_\(finance\)), and could take out loans by pledging their cryptocurrencies as [security](https://en.wikipedia.org/wiki/Security_\(finance\)). As of May 2022, the company had lent out $8 billion to clients and had almost $12 billion in [assets under management](https://en.wikipedia.org/wiki/Assets_under_management).[\[2\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-2) In June 2022, the company gained notoriety when they indefinitely paused all transfers and withdrawals due to "extreme market conditions",[\[3\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-3) resulting in steep declines in the price of bitcoin and other cryptocurrencies.[\[4\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-VergeFreeze-4)[\[5\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-5) On July 13, 2022, Celsius filed for [Chapter 11 bankruptcy](https://en.wikipedia.org/wiki/Chapter_11,_Title_11,_United_States_Code).[\[6\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-bankruptcy-6) Business model -------------- The company facilitated lending and borrowing for its users.[\[7\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-:22-7)[\[8\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-8) Depositors earned interest by depositing qualifying cryptocurrencies, with the rate of interest dependent upon the cryptocurrency deposited (e.g., up to 6.2% interest on [bitcoin](https://en.wikipedia.org/wiki/Bitcoin)).[\[9\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-:7-9) The company paid the interest in cryptocurrencies, including in its own CEL token.[\[10\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-:4-10) Borrowers paid between zero and 8.95% on bitcoin-backed loans, depending on the [loan-to-value ratio](https://en.wikipedia.org/wiki/Loan-to-value_ratio).[\[9\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-:7-9) Some of the money that Celsius used to fund the loans came from [hedge funds](https://en.wikipedia.org/wiki/Hedge_fund) that were looking for higher [yields](https://en.wikipedia.org/wiki/Yield_\(finance\)) than banks pay.[\[9\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-:7-9) Celsius generated revenue from token sales, lending, bitcoin mining, and discretionary trading of cryptocurrencies.[\[10\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-:4-10) Celsius claimed that up to 80% of its revenue was returned to its user community through interest payments on deposits made through its platform.[\[11\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-11)[\[12\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-12) The company did not charge any fees to its users.[\[13\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-:3-13) On July 7, 2022, former investment manager Jason Stone sued Celsius, alleging that the company ran a [Ponzi scheme](https://en.wikipedia.org/wiki/Crypto_Ponzi_scheme).[\[14\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-cnbc-2022-07-08-14) On August 23, Celsius sued Stone, alleging that he lost or stole tens of millions of US dollars' worth of cryptocurrency.[\[15\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-15) History ------- Celsius was founded in 2017 by [Alex Mashinsky](https://en.wikipedia.org/wiki/Alex_Mashinsky), Daniel Leon, and Nuke Goldstein.[\[13\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-:3-13)[\[16\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-16) ### Growth In March 2018, Celsius raised $50 million in its [initial coin offering](https://en.wikipedia.org/wiki/Initial_coin_offering) (ICO) of the CEL digital currency.[\[17\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-17)[\[18\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-18) In April 2018, the CEL cryptocurrency began trading on cryptocurrency exchanges.[\[19\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-:1-19) In advance of the ICO, Celsius listed its currency as a security.[\[13\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-:3-13) In June 2018, Celsius launched its mobile app. In 2019, Celsius completed a $24 million equity round at $140 million valuation.[\[19\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-:1-19) Celsius was a major buyer of its own token, buying CEL interest it owed to customers on the open market. Crypto analysis firm Arkham Intelligence estimated Celsius had spent $350 million on purchases since July 2019.[\[20\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-inside-celsius-20) In August 2020, Celsius raised $20 million via an equity crowdfunding to support its operations.[\[21\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-21) In the fall of 2020, the price of Celsius's currency climbed more than 230% in less than a month.[\[19\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-:1-19) In October 2020, the company reported that its CEO, Alex Mashinsky, sold $500,000 worth of CEL tokens in one transaction. In December 2021, Mashinsky tweeted, "All @CelsiusNetwork founders have made purchases of #CEL and are not sellers of the token." Based on public data, Arkham Intelligence estimates that Mashinsky sold $44 million worth of CEL through exchanges.[\[20\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-inside-celsius-20) In November 2020, Celsius said it had plans to open an office in Australia and to expand its office in Israel.[\[13\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-:3-13) In December 2020, Celsius had $3.31 billion in assets under management.[\[22\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-22) In January 2021, Celsius had more than $4.5 billion in assets.[\[23\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-:2-23) In October 2021, Celsius raised $400 million in new equity from investors.[\[10\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-:4-10)[\[24\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-24) The funding round was led by WestCap, the fund led by former [Airbnb](https://en.wikipedia.org/wiki/Airbnb) executive [Laurence Tosi](https://en.wikipedia.org/wiki/Laurence_Tosi), and [CDPQ](https://en.wikipedia.org/wiki/Caisse_de_d%C3%A9p%C3%B4t_et_placement_du_Qu%C3%A9bec), Canada's second largest pension fund.[\[10\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-:4-10) The funding round valued Celsius at $3 billion.[\[10\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-:4-10)[\[25\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-25) At this time, Celsius's office in Israel employed 100 people.[\[26\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-ctech20211217-26) In November 2021, Celsius acquired the Israeli cybersecurity company GK8 for $115 million.[\[27\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-27)[\[28\]](https://en.wikipedia.org/wiki/Celsius_Network#cite_note-28) --- *Originally published on [judimenko](https://paragraph.com/@clever-crypto/celsius-network)*