Collecting customer funds and releasing them as loans to others - actually the classic business model of a bank.
However, while conventional financial institutions still had to charge money for the safekeeping of customer deposits during the low-interest phase, the American crypto bank Celsius Network lured its customers with interest rates of up to 18 percent on the cryptocurrency deposits.
Gregory Bruner
Editor in Business.
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Celsius has now filed for bankruptcy.
All the usual applications were submitted on Wednesday to enable business operations to continue.
The company has $167 million in cash for this.
Deposits and withdrawals are currently not possible at Celsius.
A resumption of the deposit and lending business is not planned at the moment.
In mid-June, Celsius had to freeze the funds of 1.7 million customers.
They were denied access to around $12 billion.
The move came in response to turmoil in the cryptocurrency market, which caused the digital currency TerraUSD to fall.
Actually, their course was linked one to one to the dollar.
However, when the price began to fluctuate, the foundation behind Terra sold large amounts of Bitcoin to stabilize the price.
This triggered a major slide in cryptocurrency prices, prompting Celsius customers to withdraw their deposits en masse.
Celsius rival Voyager Digital filed for bankruptcy last week.
According to his own statements, he was torn into the abyss by failed loan payments by the hedge fund Three Arrows, which has also applied for bankruptcy protection.