The latest cryptocurrency crash leaves gamblers bruised and stunned.

“I was probably making $100 a week” on sites like Celsius, said Fong, a 29-year-old civil aviation worker who lives in the city of Derby in central England. “It covered my food costs.”

Now, however, Fong’s crypto – about a quarter of his wallet – is stuck at Celsius.

The New Jersey-based cryptocurrency lender last week froze withdrawals for its 1.7 million customers, citing “extreme” market conditions, triggering a sell-off that wiped out hundreds of billions of dollars of paper-value cryptocurrencies worldwide.

Fong’s long-term crypto holdings are now down about 30%. “Definitely in a very uncomfortable position,” he told Reuters. “My first instinct is to get the most out of Celsius,” he said.

Celsius’s eruption follows the collapse of two other major tokens last month that rocked an already tense crypto sector as runaway inflation and rising interest rates spark a flight from stocks and other riskier assets.

Bitcoin broke below $20,000 on June 18 for the first time since December 2020. It is down about 60% this year. The total crypto market plunged by about $900 billion, down from its all-time high of $3 trillion in November.

The fall has left individual investors around the world bruised and stunned. Many are angry with Celsius. Others promise never to invest in crypto again. Some, like Fong, want stricter oversight of this freewheeling sector.

Susannah Streeter, an analyst at Hargreaves Lansdown, likened the turmoil to the dotcom stock market crash of the early 2000s — to technology and cheap capital giving retail investors easy access to crypto.

“We have this collision between smartphone technology, trading apps, cheap money and a highly speculative asset,” she said. “That’s why you saw a meteoric rise and fall.”

Chart: Crypto plummets –


Crypto lenders, such as Celsius, offer high interest rates to investors – mostly individuals – who deposit their coins on these sites. These mostly unregulated creditors then invest the deposits in the wholesale crypto market.

Celsius’s problems appear to be related to its wholesale cryptocurrency investments. As these investments turned sour, the company was unable to meet investor customer repayments amid the wider crypto market collapse.

The freezing of redemptions at Celsius is comparable to the closure of a small bank. But a traditional bank, overseen by regulators, would have some form of protection for depositors.

One of those affected by the Celsius freeze was Alisha Gee, 38, in Pennsylvania.

Gee has invested “every last drop” of his salary in crypto since 2018, which has risen to a five-figure figure. She has $30,000 in deposits with Celsius — some of her entire crypto holdings — and earns her $40,100 a week interest, which she hoped would help pay off her mortgage.

Just over a week ago, Gee received an email from Celsius saying she couldn’t withdraw money. “I was pacing in the dark at 2 a.m. and going back and forth,” she says.

“I believed in the company,” Gee said. “It doesn’t feel right to lose $30,000, especially since I could have put it into my mortgage.”

Ms. Gee said she would continue to use Celsius and said she was “loyal” to the company and had never encountered any problems.

On June 15, Celsius CEO Alex Mashinsky tweeted that the company was “working tirelessly,” but gave little detail about how and when shooting would resume. Celsius said Monday it was aiming to “stabilize our liquidity and operations”.


For some, the enthusiasm for crypto is intact.

“I’ve seen multiple bear market cycles so far, so I’m avoiding any knee-jerk reaction,” said Sumnesh Salodkar, 23, of Mumbai, whose crypto holdings have fallen but are still in positive territory.

For others, warnings from regulators around the world about the risks of speculating in cryptocurrencies have come out.

Halil Ibrahim Gocer, a 21-year-old in the Turkish capital Ankara, said his father’s crypto investments, which totaled $5,000, have plummeted to $600 since he introduced him to crypto.

“Knowledge won’t get you very far in crypto,” Gocer said. “It’s luck that counts.”

Another investor, a 32-year-old IT worker from Mumbai, said he had about three quarters of his savings – several hundred dollars – in crypto. The value has decreased by about 70-80%.

“This will be my last cryptocurrency investment,” he said, asking for anonymity.

Regulators in countries around the world have been thinking about how to build safeguards for cryptocurrencies that can protect investors and mitigate risks to broader financial stability.

The cryptocurrency market turmoil fueled by Celsius underscores the “urgent need” for cryptocurrencies to regulate, a US Treasury Department official said last week.

Fong, the British investor who lost access to his crypto at Celsius, wants change to come.

“A little regulation would be good in principle, but then I think it’s a balance,” he said. “If you don’t want too much regulation, that’s what you get,” he added.

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