Desperate Celsius Users Face Liquidations as Crypto Market Tanks, Solvency Debate Begins

cryptonews.com:

Some users of Celsius (CEL), a troubled major crypto lender, are facing liquidations of their trading positions as the crypto market crashes and industry players discuss (in)solvency of Celsius and chances to sue the company.

To make things worse, the company has also suspended withdrawals, Swaps, and transfers between accounts, hindering even those users who have sufficient capital from repaying or adding a margin to their positions. 

"I have USDC in my account that I want to use to repay my loan that has a margin call right now, but I can't even repay the damn loan because of the transfer freeze," one Celsius user said, adding: 

"That's ridiculous. If the market tanks, [C]elsius will liquidate my collateral even though I can pay off my loan!!!"

Celsius paused withdrawals, Swaps, and transfers between accounts earlier this morning citing "extreme" market conditions. "We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations," the company said. 

Some users argued that the sudden suspension in withdrawals can mean the crypto lender, which claims to offer yields of over 18% on certain cryptoassets, might not have enough assets to honor all withdrawals.

On the other hand, some took the opportunity to slam the company's exceptionally high rates, calling it a "Ponzi," while others discussed the possibility to sue Celsius.

"Whether folks who can't access the crypto they "loaned" to Celsius Network can have the Celsius terms & conditions thrown out will likely turn on the extent to which they can prove something like fraud in the inducement," attorney Grant Gulovsen said.

"Fraud in the inducement occurs when a person tricks another person into signing an agreement to one’s