The crazy thing here is that, allegedly, things began to go wrong when the cryptos soared too high too fast:
Celsius began to fall apart when the prices of digital assets, such as Ethereum and Bitcoin, soared at the start of last year.
At that point, Celsius' customers started withdrawing their holdings to sell high and bank a fat profit. Celsius, however, allegedly did not have enough funds to cover these transactions, and was forced to buy cryptocurrencies at a loss to return people's assets. In an attempt to attract new customers to inject more cryptocurrency to its platform, Celsius started offering double-digit interest rates.
"[These] funds were used to repay earlier depositors and creditors. Thus, while Celsius continued to market itself as a transparent and well capitalized business, in reality, it had become a Ponzi scheme," Stone's KeyFi stated in its lawsuit against Celsius. Short on cash, Celsius allegedly failed to pay money that was owed to Stone.
https://www.theregister.com/2022/07/08/frozen_cryptocurrency_lending_biz_celsius/
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