Swan Bitcoin CEO against crypto lenders: Users are way under-compensated for the risk

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Swan Bitcoin CEO Corey Klipston believes that the liquidity crisis involving the Celsius network could be the beginning of a wider collapse in the crypto lending sector.

“It doesn’t matter if you are an amazing CEFI lending platform, taking these retail deposits and lending them back end and yielding them, or a horrible one, they are being pulled all the way down Klipston said in an exclusive interview with Cointelegraph.

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Celsius, a leading cryptocurrency lending platform, halted withdrawals earlier this month, citing “extreme market conditions”. Since then, other crypto firms including Babel Finance and Three Arrows Capital have experienced liquidity issues.

Klipston, a staunch bitcoin (BTC) maximalist, has been a vocal critic of centralized lending platforms such as Celsius.

“Their loan books are opaque, their activities opaque. […] You are being under-compensated for the risk,” he explained.

Klipston strongly doubts that Celsius will be able to fully compensate users who are currently unable to access their funds on the platform.

He predicted, “Unfortunately, this is going to be a fight over the scraps for many years.”

Klipstein described Celius as a particularly serious case of poor risk management, pointing out that similar business practices are common in the space and will soon be targeted by regulators.

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