Not your keys, not your coins (a hard lesson to learn).
Imagine if tomorrow, your bank announced it was going out of business.
And instead of giving you your money back, they were going to use it to pay off their outstanding loans...
Cause even though they're going bankrupt - they'd rather stay in good standing with their lenders, rather than the customers they're about to lose.
You'd be pissed, right?
Our guess is, that's exactly how Celsius customers are feeling right about now.
$4.7B of the $5.5B it owes, is owed to customers - but as they go under, they're opting to pay out their institutional creditors instead.
If you wondering where the logic is in this move, it's that repaid creditors may trust them again in the future, customers won't.
Here's a lesson you only ever want to learn by proxy:
"Not your keys, not your coins."
(You'll hear this parroted a lot in the crypto space, and for good reason...)
In a Web2 context, it roughly translates to: 'Not your bank vault, not your money.'
Centralized crypto exchanges, like Celsius, hold the passwords (or 'private keys') to all of their customers' crypto wallets, which means they have ultimate control over them.
If they over extend themselves, there's a chance they'll dip into your funds in order to dig themselves out of a hole.
It's a hard lesson to learn.
(Hopefully one you can do at a distance).
The (preemptive) solution?
Move your crypto to a self-custodial wallet.
