Celsius halts social media engagement as the community investigates the reasons for the liquidity shortage

Celsius said he plans to suspend all Twitter social activity and AMA sessions. The move is intended to focus more on the current situation, namely the blocking of withdrawals which has lasted for a week.

Additionally, the earning platform has asked the cryptocurrency community to be wary of scammers posing as its affiliates. The company also said it is working with regulators to resolve the liquidity problem and get back to normal as soon as possible.

Among the members of the crypto community who support Celsius is Simon Dixon, CEO and cofounder of the online investment platform BnkToTheFuture.com, as well as a shareholder of Celsius. In a blog post, Dixon proposed that Celsius apply the same tactic used by Bitfinex to solve its problems after the 2016 hack and the theft of over 100.000 BTC. quotation in real time).

So far, the company has managed to pay off some of its loans in an effort to increase its cash ratio. According to data from Etherscan, the company paid $ 10 million in DAI stablecoins to Compound Finance. It also paid $ 53,6 million, also in DAI, to the privacy-focused platform Oasis Protocol.

The Celsius Crisis: Who Should Take The Blame?

On May 6, the company recorded a massive $ 1 billion outflow, surpassing $ 397 million in inflows. A month later it announced that it had suspended all withdrawals, swaps and transfers. Some investigative minds have made it their mission to uncover and track down who caused Celsius' current liquidity problem.

Yesterday, lead analyst Plan C released a $ 20 million reward for anyone who can prove the Celsius case was an orchestrated attack. The announcement follows rumors that Celsius' fall was planned by prominent figures. Dixon agrees with this theory, noting that:

The story ends with the banks' purchase of cryptocurrency companies and their dispossession prior to the launch of the CBDC.

Meanwhile, an alleged former employee has talked about his risky investments. In a video titled "Why Celsius Fell Apart," the former employee recounts:

 "[Celsius] was engaging in some pretty risky practices, essentially borrowing assets and lending them multiple times to maximize their return."

He also noted that the company lost nearly $ 75 million in Ethereum when keeper Fireblocks lost private keys to a savings account. All of this, coupled with the recent downturn, has sparked the current Celsius woes. 

Still others have blamed FTX CEO Sam Bankman-Fried for the company's downfall - charges he has steadfastly denied. SBF has also been involved as a large number of accounts appear to have an inexplicable preference in depositing their CEL tokens on its exchange.

Short squeeze on CEL

While Celsius' Twitter remains inactive, the “#CELShortSqueeze” has been trending on Twitter, with users buying CEL tokens in support of the company. Twitter user @TheTwitOnline hopes Celsius CEO Alex Mashinsky will take note of the community's efforts. The user also urged the company to give value and utility to the token to avoid a sudden collapse after recovery.