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For Jeremy Fong, US crypto lender Celsius was an ideal place to stash his digital currency holdings – and earn some spending money from its double-digit interest rates along the way.

FILE PHOTO: Celsius Network logo and representations of cryptocurrencies are seen in this illustration taken, June 13, 2022. REUTERSFILE PHOTO: Celsius Network logo and representations of cryptocurrencies are seen in this illustration taken, June 13, 2022. REUTERS

The Celsius blow-up followed the collapse of two other major tokens last month that shook a crypto sector already under pressure as soaring inflation and rising interest rates prompt a flight from stocks and other higher-risk assets. Susannah Streeter, an analyst at Hargreaves Lansdown, compared the turmoil to dotcom stocks crash in the early 2000s – with technology and low-cost capital making it easy for individual investors to gain access to crypto.

The redemption freeze at Celsius was akin to a small bank shutting its doors. But a traditional bank, overseen by regulators, would have some form of protection for depositors.Gee invested “every last bit” of her paycheques in crypto since 2018, which have built up into a five-figure sum. She has $30,000 of deposits at Celsius – part of her overall crypto holdings – earning her interest of $40-$100 a week, which she hoped would help her to pay off her mortgage.

Gee said she would continue to use Celsius, saying she was “loyal” to the company and hadn’t experienced problems before.

 

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