Celsius is close to collapse: the platform has 19 times less assets than it needs to pay out

The WSJ analysts noted that the Celsius cryptocurrency lending platform has a significantly different ratio of assets to equity (which can serve as a reserve fund for payments in case of emergency) than similar lending organizations.

For example, the average bank in the S&P 1500 Composite has a ratio of 9:1. That is, the bank can cover ~10% of the required capital with its own capital. In the case of Celsius, this figure is 19:1.

It is important to understand that the stability of the bank, unlike cryptocurrency projects, is ensured, among other things, by the support of the regulator — the national bank of the country. Therefore, such gaps are normal for banks, but for a cryptocurrency lending platform, the 19:1 ratio of assets to equity is appalling.

Taking into account the attempt of the company’s CEO to flee to Israel and the fact that the company does not believe its own lawyers (whom it hired a few days before to solve the problem), it is likely that Celsius will collapse soon. At least 3AC has already declared bankruptcy today.