We saw the LUNA crash and we saw Three Arrows Capital filing for bankruptcy. We also saw the law dragging its feet, in many such cases. Lack of effective legislation combined with the casual attitude of many authorities, allowed crypto companies to build huge businesses – based on nothing but exaggerated predictions and plain lies.
Celsius was setup with a business model that, was applauded by even the most seasoned crypto analyst. Explaining that in a nutshell, Celsius accepted cryptocurrency as deposits and in return, promised high interest rates to depositors. The second part of the operations included, lending out of cryptocurrency in its possession. Borrowers would pay an interest to Celsius. The whole process worked much like a conventional bank, with crypto playing the role of ‘money’.
One very dangerous activity that Celsius indulged in, was to invest in projects that were highly risky and often had little relevance to commercial reality. As Celsius files for bankruptcy, it is unlikely to be pulled up for its reckless actions. All that would matter is existing numbers, losses and its inability to repay users huge sums of money. What Celsius did do promptly, was to stop user withdrawals. The simple reason being that, there was little left to withdraw. No doubt that a sizeable portion of the funds were siphoned off, at the first signs of trouble. Need not elaborate who the beneficiaries were! Suffice it to say that the top guys, get the first signs of a problem and grab what they can.
The Celsius boss openly claimed that the business had no funds, to repay the $4.7 billion that it owed users. It is very likely that the application for bankruptcy would be approved. Going from past experience of similar crypto ventures, it is realistic to presume that users will recover very little or nothing, of that $4.7 billion number.
We hear that Celsius has put together a ‘rescue’ package that, would be presented to the authorities. A similar gimmick that LUNA implemented, meant more to soften legal action – investors and users are unlikely to gain much (or little) from this move.
Celsius is just one of the crypt based companies that would go down this path, there will be many more to follow. While lame legislation and a lazy implementation of the same, should be highlighted – there is something fundamentally wrong with such companies. Entire business models have been built making an immature presumption – that Bitcoin is invincible and that, super inflated crypto markets can sustain.
As investors gained knowledge on various aspect of crypto, they realized that they were being taken for a ride. The good outcome of this gloomy situation is that, more realistic price levels would define true market mood. The emergence of the ‘smart’ investor, with growing skills to evaluate cryptocurrency happenings, would work to the benefit of the entire crypto industry.
GLITZKOIN: A quick recap of the Glitzkoin project and the GTN crypto token. The project was launched to improve the demand for natural diamonds and to enhance, the efficiency and productivity of the multibillion dollar industry.
The DiaEx diamond trading platform was developed using Stellar blockchain resources. The GTN token was launched as part of the project and is designated, as the mode of payment on DiaEx. Promoted by second generation diamond veteran Navneet Goenka, Glitzkoin assigned a multifaceted role to the GTN token.
The trading platform was completed in 2019 and was put through rigorous testing in early 2020. A team of diamond dealers subsequently did a pilot run on DiaEx with, actual transactions made on the platform. This process was largely successful and revealed a few areas for improvement. The Glitzkoin tech team was handling the minor adjustment when, the pandemic and subsequent lockdowns slowed down the process. The management will reschedule the full launch of DiaEx once the health crisis eases.
Talking about the multifaceted nature of the GTN token, the project is also focused on further increasing usage for the crypto – this aside from crypto exchange trade and the payment usage on the DiaEx platform. The concept is to have operators of various businesses, accept the GTN token as a mode of payment in their operations. Moving this idea forward Glitzkoin has confirmed a partnership with online ticketing giant Myticket.asia, wherein clients of the ticketing portal could use the GTN token as a mode of payment. Technical requirements for the integration of systems on both sides is at an advanced stage, nearing completion. Reviewing the challenges that the entertainment industry has been going through during the COVID pandemic, both managements have decided to set a launch schedule when the situation starts to normalize. The arrangement setup between Glitzkoin and Myticket.asia will form the blueprint, for similar deals to be negotiated with other business operators.