Celsius
Crypto Overview
Overview
Celsius Network was a centralized cryptocurrency lending platform that allowed users to earn interest on deposited crypto assets and take out crypto-backed loans. The CEL token was the native utility token of the platform. In July 2022, Celsius Network filed for Chapter 11 bankruptcy protection after freezing user withdrawals.
Purpose and Utility
The CEL token was designed to provide utility within the Celsius ecosystem, including: earning higher yields on deposits, receiving better loan terms, and participating in platform governance. Users could earn weekly rewards paid in CEL tokens.
Business Model Analysis
The core business model revolved around crypto lending and borrowing for profit, which is not compliant with Islamic finance principles as it involves riba (interest). The platform engaged in risky trading and rehypothecation of user deposits.
Current Status
Following the bankruptcy filing, the SEC charged Celsius Network and its former CEO Alex Mashinsky with fraud in July 2023. The platform was accused of operating like a Ponzi scheme, using new deposits to fund withdrawals and interest payments. Trading of CEL tokens continues on some exchanges but the token has no current utility as the platform is defunct.
Token Distribution
A significant portion of tokens were held by the founding team and the company treasury. There were concerns about insider trading and manipulation of the CEL token price by company executives.
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.