Celsius Network founder and CEO Alex Mashinsky on Sunday tweeted what appears to be a mini-promo to entice people to put money into the cryptocurrency platform. He points out that “these are hard times for many,” and then offers to “personally give” one new user US$1,000 if they HODL to build their “financial freedom.”
Less than a day later, a Twitter user claimed that the platform’s unique feature, the “HODL Mode,” which is a safety feature that blocks all withdrawals of any kind while activated, has been activated without user consent on certain accounts.
The claim appears to still be unproven as of this writing, and people were quick to comment that the feature is typically activated by the platform (and not the user) when Celsius detects suspicious activity, while users are able to turn it on themselves as a form of added security.
It should also be noted that Mashinsky himself responded to the claims, stating that “you know what HODL mode is and how it helps protect users. Despite that you are using fear and hate to scare Celsians.”
At least one user, @Eltxot, responded directly to Mashinsky’s tweet, posting screenshots of the hurdles his wife was forced to go through after the team placed her account in HODL mode when she attempted to withdraw funds from the platform.
But on the flip side, people are finding the alleged HODL Mode tactic believable after Celsius suffered a 50% decline in the value of assets deposited in its platform in the last year.
The platform, which works by borrowing cryptocurrencies from its customers and then lending them out for a return, saw a fall from over US$24 billion of assets in late December 2021 to just under US$12 billion as of May 17.
#HODLing ensures that outflows are limited, effectively locking in customer deposits within the platform.
Information for this briefing was found via Twitter, Celsius Network and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.