What is Celsius (CEL) crypto coin? The full story of the failed crypto lending token

Celsius (CEL) was never just another cryptocurrency. It was a promise - earn high interest on your crypto, get cashback, unlock rewards just by holding the token. For a while, it worked. Thousands of people trusted it with their life savings. Then, in June 2022, everything stopped. Withdrawals froze. The app went dark. And the CEL token, once worth over $8, started crashing - fast.

What was Celsius Network?

Celsius Network was a centralized crypto lending platform founded in 2017 by Dan Schatt and Alex Mashinsky. It launched its mobile app in 2018 after raising $50 million in an ICO, selling 325 million CEL tokens - half of the total supply. The idea was simple: deposit Bitcoin, Ethereum, or other cryptos into Celsius, and earn interest. No need to manage wallets. No DeFi complexity. Just tap the app, deposit, and watch your balance grow.

They promised up to 6.2% APY on Bitcoin, 11.87% on Polkadot, and even higher on lesser-known coins. At its peak in early 2022, Celsius managed $12 billion in user deposits. Over 1.7 million people signed up from more than 100 countries. It wasn’t just popular - it was everywhere. Ads on YouTube, podcasts, even billboards in New York City.

How did CEL work?

CEL was an ERC-20 token built on Ethereum. But unlike Bitcoin or Ethereum, it wasn’t designed to be money. It was a loyalty card. The more CEL you held in your Celsius account, the better your rewards.

The platform had four tiers:

• Bronze: Less than 5% of your portfolio in CEL - basic interest rates
• Silver: 5-10% in CEL - up to 15% bonus interest
• Gold: 10-15% in CEL - up to 25% bonus interest
• Platinum: 15% or more in CEL - up to 35% bonus interest and 30% off loan rates

Plus, if you chose to get your interest paid in CEL instead of your deposited coin, you got extra rewards. Send CEL through their CelPay feature? Get 2% cashback. It felt like a game you couldn’t lose.

But here’s the catch: Celsius didn’t just lend your crypto to borrowers. It used your money to buy more CEL tokens - over $350 million worth between 2019 and 2022 - to prop up the price and keep the rewards flowing. When the token’s value dropped, they bought more. When it rose, they paid users in it. It was a loop. And like all loops built on hype, it eventually broke.

Why did Celsius fail?

The red flags were there. In March 2021, crypto analyst Benjamin Cowen warned on YouTube: “Celsius’s yields are impossible to sustain.” He was right.

Celsius was paying out 8-12% APY on deposits. But the actual returns from lending crypto to hedge funds or DeFi protocols rarely exceeded 5-7%. To make up the difference, they invested in risky, illiquid assets - including $115 million in TerraUSD (UST), a now-dead stablecoin. When UST collapsed in May 2022, Celsius lost over $500 million overnight.

Then came the bigger problem: they were lending user funds to their own affiliated companies, like the hedge fund Alameda Research. That’s not just risky - it’s illegal. The SEC later confirmed Celsius had sold unregistered securities. Their interest accounts weren’t savings accounts. They were investment contracts.

By June 2022, Celsius couldn’t cover withdrawals. They announced a “pause” on all transfers, blaming “extreme market conditions.” But users had been told repeatedly: “No lockup periods. Your crypto is always accessible.” That promise was a lie.

What happened to CEL after the crash?

On June 12, 2022, CEL was trading at $1.15. Two days later, it hit $0.12 - a 90% drop in 48 hours. By January 2026, it was worth $0.025461. That’s a 99.7% decline from its all-time high of $8.63 in April 2021.

Trading volume? Just $213,511 per day. The token has no utility left. No platform. No staking. No exchange listing that matters. The Celsius app is gone. The website redirects to a bankruptcy notice.

Users who held CEL as part of their loyalty tier got hit twice: their Bitcoin and Ethereum deposits vanished, and the CEL tokens they held lost nearly all value. One user, DeFiInvestor, lost $85,000 in crypto and $12,000 in CEL - which had dropped from $8.25 to $0.30 per token.

Who got paid? Who didn’t?

Celsius filed for Chapter 11 bankruptcy on July 13, 2022. The court found they had only $4.3 billion in liquid assets against $7.2 billion in user liabilities. A 40% shortfall.

Secured creditors - banks and institutions that had lent money to Celsius - got 100% back. General unsecured creditors - that’s you and me - are expected to recover between 33% and 40% of what we lost. But that’s based on selling off whatever assets remain. Some of those assets are still tied up in lawsuits. Others are worthless.

The New York Attorney General fined Celsius $70 million for operating without proper licenses. The SEC charged them with selling unregistered securities. The bankruptcy trustee is still selling off crypto holdings - but most of it is gone.

What can you learn from CEL?

Celsius didn’t fail because of a hack. It failed because of greed - both from the company and from users chasing impossible returns.

Here’s what went wrong:

• Centralization: You didn’t control your keys. Celsius did. If they went down, so did your money.
• Token dependency: Rewards were tied to CEL’s price. When the price fell, the whole system collapsed.
• Unsustainable yields: Paying 12% APY on crypto isn’t magic. It’s math. And the math didn’t add up.
• Regulatory blindness: They marketed their service as a savings account. The SEC called it a security. They ignored the warning.

Is CEL worth anything today?

No. Not really.

You can still trade CEL on a few small exchanges, but there’s no demand. No utility. No future. It’s a ghost token. The only value it has now is as a warning.

If you still hold CEL, you’re holding a piece of history - the history of one of the biggest crypto failures ever. The token’s price may technically still be “alive,” but its purpose died with Celsius.

What replaced Celsius?

After Celsius, BlockFi, Voyager, and Nexo also collapsed under similar pressures. The crypto lending boom of 2021-2022 is over.

Today, regulators are watching. The Digital Commodities Consumer Protection Act passed in 2024 now requires lending platforms to hold 100% reserves. No more lending your deposits to hedge funds. No more promising 10% returns on stablecoins.

Decentralized protocols like Aave and Compound are growing, but they’re not for beginners. You need to manage your own wallet, understand gas fees, and accept the risk of smart contract bugs.

Celsius made crypto lending look easy. That’s why so many people trusted it. But ease comes at a cost - and that cost was paid by millions of users who lost everything.

Final thoughts

Celsius (CEL) was never a currency. It was a marketing tool - a way to trick users into locking up their crypto while the company gambled with it. The token’s rise was fueled by hype. Its fall was inevitable.

If you’re thinking about putting money into any crypto lending platform today, ask yourself: Do I control my keys? Are the yields realistic? Is the company regulated? And if they’re offering rewards in their own token - walk away.

CEL is a graveyard. Don’t bury your money there again.