DeFi’s Existential Problem: It Only Lends Money to Itself

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DeFi’s Existential Problem: It Only Lends Money to Itself
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Heard on the Street: Crypto lenders’ exclusive focus on other crypto projects suggests that their problems run much deeper than a Lehman-style liquidity crisis

Crypto lenders’ exclusive focus on other crypto projects suggests their problems run much deeper than a Lehman-style liquidity crisis

When cryptocurrency lending platform Celsius froze user accounts amid a plunge in valuations, it sent ripples across the industry and raised questions about what happens to user assets if a crypto platform files for bankruptcy. WSJ’s Vicky Ge Huang explains.

Cryptocurrencies keep nosediving, with bitcoin trading steadily below $20,000 for the first time since 2020. The chaos has spread to DeFi: Celsius, a top crypto lender with assets of around $20 billion, was recently forced to freeze deposit withdrawals. Last week, crypto exchange FTX said it was bailing out one of Celsius’ troubled competitors, BlockFi, with a

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