After Crypto lending company Celsius froze all transfers and withdrawals, some celsius users fear that their collateral might be liquidated.
Some of the investors wrote on Twitter about their apprehensions that their loans will be liquidated as they couldn’t top off their collateral.
The high earnings and low-interest rates offered by Celsius once attracted many investors.
On Sunday, Celsius users could not withdraw, swap, and transfer. Following this, some users went on to share their experience on social media saying that they have lost their collateral.
One person on Twitter who goes by SimplyDCA shared a snapshot of an email from the firm stating that their loan had been ‘liquidated’ because of not resolving an outstanding margin call or responding to previous communications.
SimplyDCA wrote, “I was liquidated because I couldn’t transfer my own funds to pay off loan or post collateral. This is not the reason I unbanked myself.”
Also read: How Celsius crashed Crypto Market?
There were many users who opened up about their experience with the lending firm. Another one, who goes by NghiaBui101218, pointed out that they fear depositing any more funds.
The user wrote that NghiaBui101218 has a loan on Celsius that has a margin call, but is scared to deposit more money with no guarantee that the user will be able to withdraw once the margin call is fulfilled and loan is paid off.
Several users pointed out a condition in Celsius’ terms of use that states that if the firm goes “bankrupt, enters liquidation or is otherwise unable to repay its obligations, any Eligible Digital Assets used in the Earn Service or as collateral under the Borrow Service may not be recoverable.”
A user by the name QuickshoeRacing shared his instance saying that he tried to pay off his loan before Celsius even resorted to freeze transfers and received a liquidation notice on Monday before the company eventually accepted the payment.
While he’s no longer at risk of being liquidated, his 6 BTC of collateral remains in the account. He claimed that at this point reaching out to customer service is the only way to close a loan.
QuickshoeRacing said, “Before they accepted my payoff, I received an email saying I needed to send 10 BTC to return my loan-to-value to the required 60%.”
Celsius posted an FAQ that said that customers who get a margin call should reply to the email “as soon as possible” and ask the loans team for resolution by posting additional collateral of fully paying off the loan.
The company also informed that any additional funds added into their account won’t be available for withdrawals, swaps or transfers. The same condition would apply to any unlocked collateral.
