- Celsius, the largest crypto lending platform, stopped letting users withdraw holdings on Sunday.
- Customers told Insider they have $2,300 to $105,000 in crypto trapped on the app.
- The crisis highlights a key downside to decentralized finance, where customers don't have the same protections as traditional accounts.
The crypto world is once again reeling.
Two days after Celsius, a major crypto lending platform, froze all withdrawals, swaps, and transfers, citing "extreme market conditions," customers tell Insider they have no idea what will happen to their money.
Three customers, with holdings between $2,300 to $105,000, verified by Insider, said their funds are trapped on the app until the freeze is lifted — and they still have no idea when that might be.
Their frustration shows how the decentralized finance movement, despite its promises to empower individuals, can leave customers in a tight spot without the protections afforded to more traditional accounts.
No one knows what will happen to their money
Celsius takes customer crypto deposits in exchange for high returns, lending the tokens out to other companies and individuals. As of May, the roughly five-year-old company managed $11.8 billion in assets from a customer base of 1.7 million.
But as the crypto market at large faced a brutal selloff, customer despots slowed. To stabilize things, Celsius on Sunday stopped allowing users to withdraw funds. In place of the withdrawal button is now a message saying they had been paused, customers said.
Raphael Miller, a software developer, told Insider he has almost .1 bitcoin, or about $2,300 USD as of Tuesday, stuck on Celsius
"I've already decided that I won't be able to withdrawal [sic] anything for the foreseeable future," he said.
In its memo on Sunday, Celsius said it's working to restore withdrawals "as quickly as possible" but offered no timeline.
Jake Greenbaum, another Celsius customer, is in the same boat. Known online as "Crypto King," he told Insider that he has $105,000 worth of Solana locked on the platform.
Greenbaum said he "felt something was coming" and successfully withdrew his entire $250,000 in ether holdings five days before the news dropped on Sunday. But he said he tried to withdraw other Solana funds 12 hours before Celsius announced the freeze and couldn't.
"They knew they were closing withdrawals prior to announcing and froze them beforehand," Greenbaum said. "Screwing me out of 5,000+ Solana. And their motto [sic] was literally your coins anytime," referring to the company's marketing slogan, "access your coins whenever."
Timbre Cierpke, a musician and Celsius customer, said she has been accumulating bitcoin slowly over the course of the last five years and had been storing it on Celsius.
"Unless something happens where they open up again, I will have lost about a year's worth of income," she told Insider, later clarifying that it might be closer to two years' worth.
"It's the smaller customers like me that this could wipe out," they said.
'The clock is ticking for Celsius'
Celsius said it froze withdrawals to "stabilize liquidity," meaning its deposits were not equal to the number of assets that it was holding on the blockchain. Miller said he wouldn't be using this platform until they resolved the crisis.
"At the end of the day, the poor liquidity is due to bad decisions in investing. So unless they try a more conservative approach, then I can't put my money back in," he said.
Customers, meanwhile, worry that the company may have a larger insolvency problem or that it may be forced to file for bankruptcy.
Either way, they'll have angry customers to reckon with when things normalize.
"The clock is ticking for Celsius and the longer the withdrawal button is gone the more likely their entire customer base will leave," Miller said.