According to Alex Mashinsky, the CEO of crypto staking platform Celsius, the opportunistic short sellers on Wall Street have caused the recent crypto crash.
There a loads of theories to explain what happened with Terra and Luna last week. Some of them include hackers, Russians and even Sauron.
Yet, the most believable theory is the one that asserts that greedy traders from the Wall Street were the ones to use $200 million to launch a coordinated attack on UST. They made about $800 million in just few days.
Many prominent people of the crypto market agree that is the most probable scenario.
For example, the CEO of crypto lending and staking platform Celsius Alex Mashinsky believes “the Sharks of Wall Street” can smell blood in the water and are causing instability at several crypto projects.
What caused a crypto crash?
According to CoinTelegraph, Mashinsky attributes recent Celsius (CEL) price falls, the brief Tether (USDT) depegging, and collapse of Terra (LUNA) — at least in part — to short sellers on Wall Street.
CEL has fallen from its all-time high of $8.05 to $0.82, which is a 90% drop.
In a Twitter Spaces event on Tuesday, some Celsius users claimed the platform liquidated their holdings as CEL dropped. They said trading was illiquid as the price fell, worsening their losses, and that Celsius should have supported the currency.
Mashinsky said CEL had been affected by the wider crypto crash due to the collapse of Terra and that he believed someone was targeting the company.
“This is not a coincidence. This is somebody who decided, ‘You know what? I’m going to take down all of Celsius,’” he said during the event.
Cointelegraph contacted Mashinsky for further details. He explained there was a deliberate push on from Wall Street to profit by exacerbating crypto’s problems.
“They took down Luna. They tried Tether, Maker, and many other companies. It’s not just us,” he said. “I don’t think they have [a] specific hate or focus on Celsius. They are all looking for any weakness to short and destroy.
“The point is that the Sharks of Wall Street are now swimming in crypto waters.” he said.
Asked to clarify if he meant regulators, or the funds rumored to have attacked Terra, he clarified; “Nothing to do with regulation. Just short sellers looking for weakness.”
Some more issues
Mashinsky also took issue with a Barron’s article about the Spaces event titled “Celsius Faces a Revolt as a High-Yield Crypto Plummets”.
“We have 1.8 million customers and Barron’s wrote this article because two guys on Twitter complained that they got liquidated after taking a margin loan,” he said, hinting at what caused the crypto crash.
The price of CEL has been on a steady downward trend throughout the year, from the Jan 1 price of $4.38 to the currently price of $0.82 according to CoinGecko.
Celsius allows users to stake cryptocurrency which can be used as collateral for loans. Stakers earn up to 80% of the revenue earned by the platform. Regulators in various jurisdictions also have Celsius in their sights, forcing the platform to restrict non-accredited investors from earning interest on deposits in the U.S.
Some CEL investors and stakers vented their frustrations with the price performance of CEL to Mashinsky in t May 19 AMA.
One investor accused the Celsius team of sitting on its hands while token price tumbled as a result of the Terra fiasco. (Celsius previously denied it had sustained significant losses as a result and reports suggested it had rescued $500M from Anchor Protocol.) The investor said:
“You know this stuff going on with Luna, the token obviously started tanking. Alex and the team did not step in whatsoever to support the price on the way down. They essentially just let it drop.”
In the AMA Mashinsky assured community members that Celsius “is always working in the best interest of the community,” but that he “does not control price action” on the CEL token.
“The culprit here has nothing to do with Celsius. It has everything to do with people FUDding and publishing bullshit information. So if you want to pick a fight, go pick a fight with those people and ask them ‘Why did you publish this article?’.”
He added that the liquidations on the Celsius platform that occurred in the past two weeks caused people to get hurt, but he claimed that he personally lost more than anyone. He said, “I lost more value than all the other liquidated people combined.”