Swan Bitcoin CEO Corey Clippsten believes the Celsius Network-related liquidity crunch could be just the beginning of a wider collapse in crypto lending.

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“Whether you’re an amazing CeFi lending platform taking these retail deposits and lending them out and giving them income, or a terrible one, they’re all going to be sort of pulled down,” Clippsten said in an exclusive interview with Cryptooshala.

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Celsius, the leading crypto lending platform, suspended withdrawals earlier this month, citing “extreme market conditions.” Since then, other crypto firms, including Babel Finance and Three Arrow Capital, have had liquidity problems.

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Klippsten, an ardent Bitcoin (BTC) maximalist, has been a vocal critic of centralized lending platforms such as Celsius.

“Their credit books are not transparent, their activities are not transparent. […] You compensate too little for the risk,” he explained.

Klippsten is quite skeptical that Celsius will be able to fully compensate users who are currently unable to access their funds on the platform.

“Unfortunately, the fight for leftovers will continue for several years,” he predicted.

Klippsten describes Celius as a particularly egregious case of poor risk management, pointing out that similar business practices are widespread in the space and will soon be targeted by regulators.

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