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Celsius (CEL) is an all-in-one banking and financial services platform for cryptocurrency users.
Launched in June 2018, it offers rewards for depositing cryptocurrency, along with services such as loans and wallet-style payments.
Users of the platform receive regular payouts and interest on their holdings. Celsius’ native token, CEL, performs a variety of internal functions, including boosting user payouts if used as the payment currency.
Celsius originally came into being as the product of creators Alex Mashinsky and Daniel Leon in 2017.
Mashinsky has a long-running history in the internet development sphere, having worked on the Voice Over Internet Protocol (VOIP) in the 1990s and other technologies since. Celsius is far from Mashinsky’s first corporate venture, with seven startups and 35 patents to his name, the project’s official website states.
Co-founder and COO Daniel Leon meanwhile has experience focusing on growing early-stage startups. His previous roles include being CEO of Atlis Labs, a social recommendation and discovery app which used real-time user referrals.
Celsius now has a large team of core employees, technical developers and advisors with experience in various spheres.
Celsius aims to outperform banks at their own game by offering financial services on the kind of terms which traditional financial institutions no longer offer.
These include much higher rates of returns on savings and deposits, much easier and fairer loan requirements and automated rewards computed for each user algorithmically. Penalties and bank-style fees are also waived.
The platform also functions as a wallet via its CelPay feature, and hosts its own CEL token which users can leverage to increase payout value among other things.
As a for-profit company, Celsius takes a cut of profit margins on interest payments, still returning 80% to users themselves. The company also lends to institutional entities such as hedge funds.
Payments are ensured because loans are asset-backed, and any borrower must supply more than 100% of what they borrow in the destination currency.
By acquiring all of Celsius mining equipment and infrastructure, Ionic Digital believes it can quickly reach its goal of total mining power of 12.7 exahash per second (EH/s) later this year.
Celsius said it will initiate a controlled wind-down of operations by February 28, 2024. The crypto lender will discontinue its mobile and web applications.
The court filing contends that the government’s handling of cryptocurrencies creates an inconsistency and contradiction between the second count of commodities fraud and the first count of securities fraud.
Blockchain analytics firm Nansen reports that almost a third of the ETH in the pending withdrawal queue belongs to Celsius, totaling 206,300 ETH valued at approximately $468.5 million at current prices.
The deal with Hut 8 comes after Celsius recently obtained approval from the bankruptcy court to transition into a Bitcoin mining entity that creditors will solely operate.