The Celsius examiner's report is out and it has lots of detail. Quite a while ago we sketched a theory of what might have happened. The key elements were:
- Mistakenly staked ETH
- Pledged some BTC for a loan that they then defaulted on
- Promised 10%ish more yield to depositors than they could earn on the assets
- Spent a bunch of money pumping its CEL token
- Had high cash expenses
- Also lost some money due to bad trading and hacks
Broadly speaking this looks right. The report has a lot of detail regarding CEL and a wide range of pump-and-dump schemes. Much of that is now widely reported. But there are also fascinating details of #4 and #6 – the degree to which their "market" activities were failures – in the report.
Among other problems, we can see clearly that much of Celsius' trading operation had no idea how to operate their business. Celsius got a range of basic concepts wrong and never seemed able to repair the damage. Let's dig in to a few highlights.
