Celsius
Crypto Overview
Background
Celsius Network was a centralized cryptocurrency lending platform founded in 2017 by Alex Mashinsky. The CEL token was intended to serve as a utility token within the Celsius ecosystem, offering users benefits like enhanced earning rates and loan discounts when holding CEL tokens.
Intended Utility
The CEL token was designed to provide utility within the Celsius platform through: Enhanced yield rates for holders, discounted loan interest rates, cashback rewards on loans, and governance participation rights.
Current Status
In June 2022, Celsius Network filed for Chapter 11 bankruptcy protection after freezing user withdrawals. The company faced allegations of operating like a Ponzi scheme and mishandling customer funds. In July 2023, former CEO Alex Mashinsky was arrested on charges of fraud related to the platform's collapse.
Token Distribution and Governance
The initial token distribution heavily favored the founding team and early investors. There were significant concerns about token manipulation, with allegations that Celsius artificially inflated CEL's price using customer funds.
Business Model Analysis
The core business model relied heavily on interest-bearing lending and borrowing activities, which are fundamentally problematic from an Islamic finance perspective due to the involvement of riba (interest). The platform's actual operations deviated significantly from its stated mission of financial inclusion.
Crypto Impact
To assign a comfort level investing in Celsius from a halal perspective we need to determine whether it has a net positive or negative impact.
Towards this end, the table below is used to tally all the positive and negative considerations our members can think of related to Celsius.
If you don’t see something that should be listed, positive or negative, feel free to submit your own contribution using the button “Contribute”.
We will review your contribution for accuracy before publication.
Importantly, you can review listed contributions and vote on which one you think has the greatest impact, positive or negative.
You only have one vote per asset so use it wisely.
You can change your vote if you change your mind.