Unregulated crypto was great, until it wasn’t – KTLA Los Angeles

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by: David Lazarus
by: David Lazarus
The rout of cryptocurrencies continued Monday, with big-boy Bitcoin down more than 70% from its November high.
But two other developments should be prompting all crypto enthusiasts to rethink their holdings.
The cryptocurrency lending firm Celsius is pleading with users to be patient as it figures out how to stay in business at a time when its business looks increasingly shaky.
The company is blocking users from taking their money back by freezing withdrawals due to “extreme market conditions.”
“We want our community to know that our objective continues to be stabilizing our liquidity and operations. This process will take time,” Celsius said in a blog post Monday.
Meanwhile, another crypto lending firm called Solend tried to take control of its largest user account after deciding the account holder had too much influence over the platform.
“In the worst case, Solend could end up with bad debt,” the firm said. “This could cause chaos, putting a strain on the Solana network.”
Just chew on this a moment.
Crypto, long hailed by enthusiasts for its unfettered, freewheeling nature, is now deemed by the businesses backing the digital investments as too dangerous to let account holders do as they please.
Too dangerous, that is, to the crypto businesses, which face financial peril from a free market.
Blocking withdrawals is a severe step, seen in the banking world only during intervals of enormous upheaval, such as the Great Depression.
A private company trying to take control of an investor’s account simply because it’s too influential is unheard of in traditional finance.
In Solend’s case, users of the platform blocked the move, but that doesn’t mitigate the company’s self-serving intentions.
This is what happens when a financial market is created largely without rules or official oversight. Players start acting in their own interest, and there’s often little to stop them from doing as they please.
Go ahead and put your money into cryptocurrencies if you believe the hype.
But go in with your eyes open. You’re largely on your own.

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