Crypto Lender Celsius To Stop Paying Interest on New Deposits From US Starting on Friday (theblockcrypto.com) 39
Celsius will stop offering its crypto interest accounts to US users at the end of this week. From a report: Per an April 11 announcement, the crypto lender will transition new deposits from US users to custody accounts. Critically, those accounts will not pay interest, unless their owners are accredited investors. Existing deposits will, however, continue to pay normal interest. As of today, those interest rates on offer go as high as 18%, with stablecoins paying over 7% returns. The move happens as Celsius, as well as competitors like BlockFi and Nexo, have faced increasing scrutiny from US securities regulators. The New York Attorney General sent letters to firms offering crypto interest accounts in October. Nexo, which is not based in the United States, cut off new US accounts from earning interest back in February.
Fahrenheit (Score:2, Funny)
Another thing I'm supposed to be worried about that I've never even heard of.
Celsius, as well as competitors .. act like banks (Score:5, Insightful)
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"Critically, those accounts will not pay interest, unless their owners are accredited investors."
The SEC has a basic approach: don't screw average Joe, meaning you're regulated to death if you take non-accredited money. However if someone is wealthy (the actual definition of accredited investor is either $200k AGI ($300k if married) OR $1M net worth not counting your primary residence), it's buyer beware
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Basically, if you're rich, you're allowed to invest and become even more rich, if you're not, high regulation makes sure you have to work harder to get to a certain level, only then, can you too become part of the ultra-rich class.
And yes, this has a significant impact. If I want to invest my hard-earned money into something I think will do really well, I'm only allowed to invest up to $2000/year, thereby limiting my yields significantly. But there is no such limit into actual gambling, I can go spend $20,0
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I live in a wealthy neighborhood because I can afford it, although it's the smallest house in my neighborhood. Some folks are stinking rich. But i live here for the schools which are the best in my state. Why? Because school districts are funded by property taxes. Rich people buy expensive homes and the public districts in those ar
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If you are neither rich nor savvy enough to circumvent the regulations (not that hard) then you should be investing in index funds, not crypto.
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You can think of it that way.
Or you can think of it as protecting less sophisticated investors. After all, if you're in the "rich" class, then if your $10,000 investment flops, you're far less likely to be introuble than someone who can't make ends meet gets scammed out of $10,000
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Thanks "Mama Feds"....
Look , we have regulated banks and investments and that's there for people to be safer, but WTF should our government stand in the way of those that don't mind more risk for more reward in the "Wild West" area of investment, etc?
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Banks don't offer 18% interest. They're acting like somebody, but it ain't banks.
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Ah well all rich people have large stock and bond portfolios as well. So, apparently, smart money invests in businesses, too.
I know it is a popular attitude that investing in stocks is "just like gambling, but legal," though this attitude is rooted in ignorance. People who know so little about it that they believe this are probably better off staying away from it, as the investment approach they would take WOULD BE about the same as gambling. But the even better option is to acquire the necessary educati
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Strong people lift weights. I would like to be a strong person. But I am too smart to be tricked into lifting weights.
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The problem is that most people have no clue about the difference between: Trading, Day Trading, Investing.
They're 3 completely different things with completely different risk profiles.
Most people who think 'it's just gambling' are thinking of Day Trading, because that's pretty much all Hollywood ever shows you in regards to the stock market.
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Different. But still Same.
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They're not actually different, the only difference is your personal involvement and which proxies you use.
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Another difference is the outcomes.
Nearly all day traders lose money.
Nearly all diversified long-term investors make money.
Re:no rational person can refute. (Score:3)
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The stock market is THE means by which ordinary people like you and me can own the means of production.
"Private ownership of the means of production" is the essence of capitalism. Furthermore, ownership of the means of production is the most potent form of wealth that one can own. Stocks simply provide a means of breaking very large businesses up into very small tradeable shares so that ordinary people, like you and me, can get in on this ownership even though we aren't already billionaires.
Contrary to yo
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whyumadbro?
You're also looking at only one piece of the puzzle. Some notable additions to your ramble:
- When a company sells stock, they get the proceeds of that sale.
- Stock price/market cap results in tangible valuation for a company which hugely influences things like borrowing that are critical to business operations
- Stock is often part of compensation and having it easily salable or held as an investment is necessary for it to be valuable
- Shareholders get voting rights (usually) which literally let'
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I know it is a popular attitude that investing in stocks is "just like gambling, but legal," though this attitude is rooted in ignorance.
Investments with a potential payback well enough to make a poor person rich are indistinguishable from gambling. The reason rich people dabble in them is because they can afford the loss, the average working-class person cannot.
Literally all rich people do this, and it is a key component of how they become and remain rich.
No. Most self-made rich people became wealthy by means of entrepreneurship. Investing is what they do after they're already relatively wealthy, so they can get even more money.
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If you treat the stock market like a get rich quick scheme, then it works similarly to a get rich quick scheme. I.e. you will be disappointed. If you regard it as a way to triple your money every 20 years, you will probably be pleasantly surprised that it's done a bit better than that.
When you're rich it's not gambling (Score:2)
For us peon's it's gambling because we don't have a gun to the head of everyone in America. So nobody's gonna bail our asses out if we make a few too many bad picks.
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you can do insider trading and stock manipulation with impunity and get away with it (see: Elon Musk & Twitter)
Yeah, if I tweet "is Twitter dying?" it doesn't make the news. Hell, I doubt anyone on Twitter even sees it.
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No, its still not gambling for this reason: when you gamble (such as in play poker or buy lottery tickets or whatever), you put up your money in return for "a chance to win" and nothing more. A lottery ticket has nothing backing it; it is one chance to win and that's it. When you invest in stock, you purchase a part of a business. Your stock is backed by that business, in a legally-enforced way. Ordinary people like you and me will never be able to buy enough stock to fully own a business, but we don't
Re:Bad Idea (Score:4, Interesting)
The more I learn about crypto the more it feels like a game of musical chairs; there isn't an intrinsic customer value in the end as it will never be used for transactions for legitimate businesses, so it's just speculation growth until the music stops and everyone left without a chair loses their shirt. Doesn't mean you can't make money, but you have to be on your game to know when the music is slowing and it's time to dump. I don't have enough interest to follow it that closely, and most people putting money in likely don't either.
Most crypto people remind me of the CDO manager in the Big Short. The guy was arrogantly talking about what he was doing and used his net worth to show how valuable he was to society, but clearly did not understand the risk profile of what he was doing with CDOs or synthetic CDOs and naively sold complex hyper toxic assets to very unsophisticated people, exacerbating the MBS-induced crash. https://www.youtube.com/watch?v=A25EUhZGBws
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You're literally describing a ponzi scheme, or a greater fool scheme, which coincidentally is what almost all crypto related finances are.
So ... (Score:3)
Critically, those accounts will not pay interest, unless their owners are accredited investors.
The many regular subsidize the special few -- sounds like Wall Street.
wait wut? (Score:5, Insightful)
So, their corporate strategy is very, very close to "we're running a Ponzi scheme, and we freely admit it. Come join us".
And 7% growth on stablecoin accounts? That's basically an admission that stablecoins aren't stable at all. Aren't those things supposed to be tied to the dollar?
Maybe I'm old and lack vision, or maybe I don't understand this new ecosystem. But I see nothing but red flags.
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It depends on the company, but much like a traditional bank, they're continuing to do things with the assets while they're deposited. While I agree that 7% interest on stablecoins feels uncomfortably high (one site I was looking at was offering 11%APR on USDC for deposits that are locked in for minimum of seven days), they also do loans at competitive interest rates, but require a lot of collateral, that I suspect is part of the greater plan... I know multiple people who've taken out loans at 0-5%APR to go
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No, the SEC is requiring them to do this. Basically the Biden admin is saying: unless you're rich, we at the government think you don't deserve 18% interest rate savings.
If you move your assets to another country, set up the paperwork there to do this, then you still get 18% interests, but the barrier has been raised significantly.
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The company response: ok, we admit we're a Ponzi scheme, we'll adhere to the legality by offering zero interest on US accounts moving forward, but there are loopholes and countries where we can continue to offer our stratospherically-risky near-fraudulent 18% to some older investors.
Sounds like the Biden administration is doing it's best to prevent a doomed-to-c
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If you move your assets to another country, set up the paperwork there to do this, then you still get 18% interests, but the barrier has been raised significantly.
Celsius can also lose your entire investment tomorrow with nothing to show for it and there's no recourse for you to take. It is not a savings account and should not be built-up like one, its a gamble.
My Experience - An Overdraft Story (Score:2)
So I got a little overzealous with my "make the money work for me" philosophy. I set up automatic transfers to move income into other vehicles. When I set them up, I didn't get the timing quite right, and one of my transfers caused my chequing account to go negative.
Because all of the activity corrected things almost immediately, I didn't see why I had been charged an overdraft fee, so I called the bank.
I asked why the charge was present, and the rep said, "Okay, let me check here. Looks like the account we
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So, their corporate strategy is very, very close to "we're running a Ponzi scheme
Not at all.
A Ponzi scheme entices new customers by promising riches.
They are dissuading new customers by telling them they will get nothing.
That is the opposite of a Ponzi scheme.
New money drying up (Score:2)
Nothing to pay out the new members joining at the bottom of the pyramid. Good luck to anyone that got in late or gets in after this point.