On the evening of June 12th, 2022, I received an e-mail alert from the Celsius Network to the effect that withdrawals were being halted on account of ‘extreme market conditions.’ Which was true, the global cryptocurrency market was in the red, with practically all coins shedding 10% or more within a rapid 24 hours.
Fresh off of the downfall of Luna and TerraUSD, I initially thought that the move Celsius was doing (in freezing transactions) was genuinely in the best interest of its ‘community.’ Preventing a mass exodus of investments would give them time to stabilize their liquidity issues and protect the assets of the depositors (like myself).
In the last couple weeks, the company has been frustratingly silent about the current status of their operations and consequently, access to our funds. Many Tweets and news articles that have come out lately about the company all seem to suggest the company is moving towards bankruptcy filing – which, Alex Mashinsky (CEO of Celsius Network) and his company have given us little reason to think otherwise.
I had a generous amount of my families money invested with this company. I was drawn in by the impressive yield and a charismatic charlatan of a CEO. If you’ve read my previous post about the company, I (initially and foolishly) complimented the company for their ‘transparency.’
Only after being involuntarily locked out of access to my funds do I finally have some clarity as to how scammy this whole thing was. I trusted my families hard-earned money to a company solely based on reassurances of its salesman CEO; and what’s worse is I promoted it to others on this very blog. While I constantly caution my readers that I am not offering financial advice, and self-describe myself as an amateur investor at best; I falsely (and blindly) believed this company to be one of the good guys and truly saw it as a movement against the establishment.
It is through suffering that learning comes.– Aeschylus
As of writing this post, nearly 3 weeks after the Celsius lock-out – I have come to terms with the real likelihood that I will never see those funds again. I am hoping for the best, but have mentally prepared myself for the worst. I have been a victim of a Ponzi scheme before; but this took me for significantly more money and left me feeling much more moronic then my past encounter. Rather than waste another minute more of anxiety or suffering on it, I am hoping this experience will teach me to be a better investor.
I am reminded of the news story about the young boy who committed suicide when the Robinhood trading app allowed him to over-leverage his investments and the kid accrued losses of over $730,000. (By the way – something a little eerie I just noticed was his suicide note was found by his parents on June 12th, 2020 – exactly two years to the day from my Celsuis email.) For me, especially as a father of two boys, this article was devastating to know that some child took their own precious life over financial problems.
Fortunately, first and foremost, I value how precious life is. Monetary loss, deep in debt, being broke – it sucks while you are in the thick of it, but everyone is capable of rebuilding and recovering from the worst financial situations. For me, that means learning the lesson of ‘if it seems too good to be true, it probably is.’
Honestly, I am not sure what my investing strategy looks like moving forward. I still continue to dollar-cost average into this tumultuous stock market. I most likely will shy away from crypto for a while. And probably get my real-estate exposure with REITs versus enrolling in more risky syndication deals. Really I just want to come out of this a lot wiser.
Hopefully none of you have had to endure being the victim of something like this, but feel free to share with me your story if you are so inclined! Thanks for taking the time to read this post!