Almost one-quarter of the workforce at American-Israeli crypto lender Celsius was laid off last month as the company faces restructuring and possible insolvency.
According to LinkedIn, Celsius has about 650 staff members, but 150 of them were let go amid a financial crisis that saw customer withdrawals halted in June.
Celsius cited "extreme market conditions" for its decision to pause withdrawals and hire restructuring specialists. The company is also exploring options to "preserve and protect assets" following the turbulent situation.
It is being reported that central banking giant Goldman Sachs is leading a $2 billion raise from investors to purchase Celsius' distressed assets. Crypto exchange FTX, meanwhile, passed on a deal to purchase the company itself after examining its toxic finances.
"Celsius joins a growing (number) of crypto firms letting go of staff amid bearish market conditions. Coinbase (COIN) laid off over 1,100 employees in June, with exchanges Bybit, Huobi, Banxa and several others letting go of staff in the past month," Coindesk reported.
Billions of dollars in bitcoin trapped inside Celsius and other exchanges; CNBC says investors may have to just write it off
The plight of Celsius and these other exchanges came about during a massive cryptocurrency crash that sent bitcoin and many other coins in a downward spiral.
This "correction" left many companies that handle crypto in a bind as they apparently were not holding enough assets to accommodate their customers, suggesting widespread fraud throughout the industry.
The latest reports indicate that billions of dollars worth of bitcoin are now trapped inside halted or failed platforms such as Celsius. Investors may be forced to turn their holdings into a tax write-off, as they may never be able to get it back out again.
Centralized crypto storage solutions, it turns out, are not a safe place to hold one's digital assets. Unless your crypto is held in a private wallet, it is subject to possibly disappearing in the event of "extreme market conditions."
Even those who do hold bitcoin and other cryptos in private wallets are reeling at the sudden and massive drop in prices that have occurred over the past several months – not the best store of value, especially for those who bought in really high.
"If your funds become totally worthless and irrecoverable, you may be eligible to write them off as a nonbusiness bad debt on your taxes," says Shehan Chandrasekara, a certified public accountant, about funds that are not trapped inside crypto lending platforms.
"It's not going to cover up your entire economic loss, but it's going to give you some type of tax benefit because at least you get to write off that initial investment that you put in."
This is the type of thing over which you take to the streets, not just suck it up and write some of it off. That any crypto investor is just accepting this without question is truly mind-boggling.
Currently, many of the crypto platforms that are now in dire straits claim that the freezes and other problems are just "temporary" while they scramble for new ways to shore up liquidity. Or, in the case of Celsius, they are attempting to restructure and secure additional lines of credit.
"Electronic currency was the magic plan for the current government to be able to steal everyone's bank account," suggested one reader at Natural News about crypto.
"Imaginary money is like all other imaginary things: it's a cute idea, but when the gold standard, silver certificate or just plain government's promise plunges in value, then imaginary money goes 'poof!'"
The latest crypto-related news can be found at DollarDemise.com.
Sources include:
Please contact us for more information.