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Celsius Network: A Warning

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Avatar for jFlynnW
Written by
1 year ago

“Whoever is faithful with very little will also be faithful with much, and whoever is dishonest with very little will also be dishonest with much.” Luke 16:10

Until recently I had been very skeptical about cryptocurrencies, mostly because I didn’t understand them and hadn’t really thought much about their use case.  It wasn’t until I started to have a bit of money saved up that I started looking into investing it anywhere at all.  As I saw my bank balances accumulate, I saw money just sitting there, not doing anything but generating a few cents in interest every month. 

While looking around at traditional banking and investment accounts, and seeing very little that looked promising, is when I noticed companies offering annual return rates in interest that are comparable to investment portfolios people bragged about… except that you need to hold it in crypto.  Anyway, most of you reading this know what happens next, the rest of you can guess.

One of the platforms that caught my eye and sounded worth trying out was Celsius Network.  I had read several reviews that where positive and, still being new to the crypto scene, didn’t really know how to look (or want to look) for the bad news.  I came across an affiliate link that offered $40 in BTC for holding $400 in assets for a month (while drawing interest to boot!) and took the plunge.

All in all the service is as advertised and what you might expect from a custodial wallet that offers interest on your coins.  After you sign up, do some KYC, and send them your coins just sit back and wait for the interest to pile up 100 times faster than your bank account! For the vast majority of users, I’m sure it works just that well…

Until it doesn’t.  I signed up about a month ago, so if everything had gone well the $40 worth of BTC would have gone a bit further now than at the beginning of May.  The trouble came when I decided to send all $400 at once with about 0.12 ETH.  First, let’s count my newbie mistakes: 1) I didn’t really understand ETH and gas so $400 turned into less than that real quick. 2) I was simultaneously testing out different ways of acquiring crypto (in this case through MetaMask) and overspent that way as well. 3) I didn’t send a test transaction first.  

The next thing that happened is what one should expect when leaping before looking; I sent the money and the Celsius wallet didn’t acknowledge it!  My first experience with a bug in crypto and it was with the largest amount of money I had ever sent in a single transaction!  I’m sure many of you have had similar experiences and you have learned this lesson the hard way as well, this part of the warning is for the other newbies like me. Test Everything!

The next part of the warning is this:  Celsius still hasn’t made my funds available to me after the issue has been escalated to their dev team for over 3 weeks!  To be clear, I did not send the money to the wrong address.  Etherscan clearly shows the transaction to the correct address and very much confirmed on the network, but after 1 month since the original transaction I cannot access my funds.  Every time I ask Celsius support for an update, I get a response back a day or two later reminding me my case has been escalated and they’ll reach out when there’s an update (don’t call us, we’ll call you).  The not yet old adage, “Not your keys, not your crypto” is definitely true in this case.

More recently I had a similar experience with a bug sending a transaction over Stellar where the sending software left off the memo (it could also have been me, but I don’t think so).  Regardless the receiving service, also a CeFi company, made it right in a matter of days (really 1 business day, because it was over a weekend).  The difference in the quality and level of service between the two is night and day.  It wasn’t their fault, it was either mine or the sending exchange, but they still made it right for me.  That company was Crypto.com.

In spite of the bad luck with the early transaction, I continued funneling crypto into Celsius (albeit at a much slower rate).  After the similar experience with crypto.com however, Luke 16:10 started running through my head.  I’m sure there are many folks out there who’ve had the complete opposite experience I’ve had with both companies, and I’m not trying to say one company good while the other is bad.  I am saying, if something sounds too good to be true it probably is.  But also, test all things and hold fast to what is true.  I decided to pull everything out of Celsius I could and that $40 of BTC isn’t worth finding another bug in their app that will result in another few hundred dollars I may never get back.

Also, you can use my referral link https://crypto.com/app/792k3s7xps to sign up for Crypto.com and we both get $25! While not quite as potentially lucrative as the Celsius referral, I feel better about recommending this one. If you’re okay with a little KYC and think earning interest on some of your BTC (or BCH!) is worth the risk, well, I think you could do worse out there. Whatever you do, be wise and test all things!


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Comments

Most newbie's passed through this stage of learning through costly mistakes but I am happy you were able to live past it...

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