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Is Celsius Network Safe? My Honest Review Of Celsius

Cryptocurrency interest accounts have been around for some time now. However, only a few players in this ecosystem have become major yield-earning vehicles, and the Celsius Network is one of them. I have been using the Celsius Network for more than a year now with great success.

Over the past 12 months, I have been able to earn sizeable rewards consistently on my deposited cryptocurrency. I have also managed to borrow cash using my cryptocurrency that would have otherwise been idle and unproductive. I can say I have gained some considerable experience using the Celsius Network as a secure and lucrative investment platform.

However, some people are skeptical about how they can pay out such large sums of money and worry over the safety and legitimacy of Celsius.

In this article, I’ll give you everything you need to know about the security of the Celsius Network, and how they make money and payout such high interest rates.

Before we get going:

I would greatly appreciate it if you decided to use my referral link. That’s a nice (and free) way to support my work.

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I hold about 60 percent of my crypto on Celsius, and I’m really happy with them so far.

How Does Celsius Make Money?

Celsius is a lending platform built on blockchain technology. I can borrow funds from the platform or deposit my cryptocurrencies to be lent out to institutional investors.

In exchange, I can be able to earn interest. To understand how the Celsius Network makes money, one must understand the Celsius value proposition or offerings/services. Below are the three main services Celsius offers:

1. Borrowing

I can borrow money or CEL, which is the native token on the Celsius Network. If I need money to spend quickly, I can borrow cash. I have the option of using more than 40 different types of coins, including BTC, ETH, LTC, and UNI, as collateral, and Celsius can lend out this collateral to institutional investors.

Personally, I’m loaning USDC with BTC as collateral. Bitcoin generally has lower volatility than most altcoins, which makes it a decent collateral asset.

Celsius loan approvals do not require credit checks and are fast. Also, I don’t have to incur any origination fees. The good thing with Celsius is that I can choose how much of my cryptocurrency I want to use as collateral. This aspect is absent in banking and other traditional lending instruments.

The Celsius system is called the loan-to-value ratio or LTV. Celsius has 25%, 33% and 50% LTV options. This means that you can loan 25% – 50% of the collateral you put up. The interest rates on the loans range from 1% to 9%.

As of September 2021, the interest rates were 1% for 25% LTV, 6.95% for 33% LTV and 8.95% for 50% LTV. If I choose to get my payment in CEL, I can be afforded an even lower interest rate. However, I always consider the fact that CEL can fluctuate.

For example, if you put up four BTC as collateral, a 25% LTV will give you a loan of one BTC and the interest rate will be 1% p.a of what one Bitcoin is worth at the moment you take the loan.

Also, if you have some USDC or BTC sitting in a celsius wallet, you can automate the interest payments making everything super smooth.

As a final note, you can also extend loans if you need some more time before paying them, making Celsius loans extremely flexible.

2. Earning/Yields

By keeping my virtual assets on deposit with the Celsius Network, I can earn up to 17% APY. Celsius pays interest on more than 25 cryptocurrencies, over ten stablecoins, and the Gold token (PAXG).

Celsius pays me weekly, and there are also no fees or minimum balance necessary to earn on my cryptocurrency deposit.

The rewards are different depending on the type of cryptocurrency an investor chooses to deposit with Celsius. Also, investors outside the U.S. can be eligible for one of the Network’s loyalty tiers. These tiers pay out bonuses based on the cryptocurrency portfolio percentage held in CEL tokens.

Below is a brief breakdown of the loyalty tiers:

  • Bronze – 5%-10% CEL token holdings with 5% bonus rewards.
  • Silver – 10%-15% CEL token holdings with 10% bonus rewards.
  • Gold – 15&-25% CEL token holdings with 15% bonus rewards
  • Platinum – 25%-100% CEL token holdings with 25% bonus rewards

CEL reward rates are dynamic. The rate applied today may not be the same tomorrow.

3.CelPay

The Celsius Network also provides a service called CelPay.

CelPay is an in-app payment system. With this service, you can easily network with other Celsius users as well as send and receive cryptocurrencies. CelPay allows for this without the need for network fees or unwieldy crypto addresses.

If I send two ETH, the recipient gets two ETH, even if they don’t have a Celsius wallet. Celsius is renowned for not charging any network fees for these services (fees like gas fees on Ethereum).

Any fees a user might incur in the app derive from third-party services such as Simplex, Coinify, or Wyre, if they are purchasing digital currencies.

Get strated with Celsius now:

Are you ready to start earning a passive income with Celsius? Get those weekly interest payments!

Download the app by clicking the link below:

The referral code is: 180361ac09

I’m using Celsius to earn interest as well as take out loans. Why not put your crypto to work?

So, How Does Celsius Make Money?

Now to the big question. How is the Celsius Network able to pay these lucrative interest rates? After all, they have paid out over 750 million bucks in interest payments in the last 12 months as per their homepage:

Is Celsius Safe?
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The answer is quite simple, actually:

Celsius earns money by lending the platform’s digital assets to borrowers in the retail and institutional circles. These borrowers pay interest which is the basis of the yield offered to investors placing their crypto on the Celsius platform.

Unlike many other loans in this industry, the loans given out by Celsius are collateralized or asset-backed.

Borrowers back the loans with assets worth more than the loan they take. In case of loan defaults, Celsius pays down the loan using the aforementioned collateral. Celsius lends out funds responsibly and has measures in place that prioritize the community’s interests.

One of the objectives of the Celsius Network is to return up to 80% of the revenues generated from lending out the users’ assets back to the community. The platform does this every week.

Since the rate of returns achievable in the lending ecosystem changes nearly every day, Celsius has to change the rates of community yield every week. The Celsius Network distributes profits/earnings along to the customers.

BTW:

Celsius is a large part of my Bitcoin investing and trading strategy. If you’re looking for a new strategy to make those extra gains check it out: My Personal Bitcoin Investing & Trading Strategy.

Is Celsius Safe? The Security of Celsius:

Here’s the skinny version:

The Celsius Network is highly secure and safe. They are licensed by the SEC, they have received ISO/IEC 27001 certification by the International Organization for Standardization, and they’ve never had a security breach. Celsius has a dedicated security team with excellent competence.

Let’s get into the details:

Celsius shows commitment to maintaining high-security standards and keeping customer data and assets secure. In May 2021, Celsius received ISO/IEC 27001 certification. This was following a thorough external audit of the platform’s ISMS (information security management system) for maintenance of its curated financial services.

This certification is an internationally recognized set of IT security management protocols published by the ISO (International Organization for Standardization). The Celsius security group conducted a rigorous application process for one year. ISO/IEC 27001 is a notable benchmark of excellence in security.

I have confidence in the network security of Celsius. This is because, since its inception in 2017 by Alex Mashinsky, the Celsius Network has never experienced a security breach, hack, or loss of user funds. The network has a largely positive track record and reputation, establishing itself as a trusted wealth management platform.

Celsius is also licensed by the American SEC and FinCEN. The company enforces measures to protect customer assets, including biometric signatures and two-factor authentication. Celsius stores its funds with established third-party custodians such as Fireblocks and PrimeTrust. These custodians offer insurance on investor assets.

Celsius also has a commendable security team composed of cybersecurity professionals. Using the Celsius Network, I’m trusting the platform to pay out interest and provide loans fast. These and other aspects allow me to vouch for the solid security of this digital investment platform.

Do you get why Celsius is so awesome now?

We’ve covered why Celsius is super safe, and that the business model is legit. Are you ready to get started?

Download the app by clicking the link below:

The referral code is: 180361ac09

How to Use Celsius Safely

One thing I like about Celsius is that it features extra layers of security that users can implement to secure their assets further. One of these features is the Celsius HODL mode. HODL or “Hold on for Dear Life” is a measure used to discourage crypto investors from selling their assets impulsively during sharp market turns (dramatic drops or very sharp increases).

The Celsius HODL mode is an additional layer of wallet security users can implement on their accounts. When HODL mode is activated, no outbound transactions will be processed. Using HODL mode helps prevent phishing or hacking attempts to steal your assets.

Let’s say I don’t intend to withdraw any of my assets for a certain period. I can use the HODL feature to protect my account from any malicious activities during this time. I find that this feature offers me great peace of mind.

When I activate HODL mode, I get an eight-digit numeric code. I have to enter this code when I want to turn off the HODL feature. This way, I alone have control over access to my Celsius wallet. Users are advised not to share the code with anyone.

Celsius strongly recommends that users secure their accounts with two-factor authentication(2FA). 2FA ensures that someone who gains access to your login information (password and email) can’t access your account. 2FA requires access to a user’s phone to log in to their Celsius account.

Enabling 2FA on the app is relatively straightforward. In the app, the user taps on the Celsius logo (bottom right corner) and then taps on the “Profile” tab. There is a “Security” option under the profile section.

The user then taps on the “Two-Factor Verification” slider. Once they enter their current PIN, they scan the QR code or copy-paste the copy and click “Continue. A separate authenticator app is required to activate 2FA on Celsius. The user opens their authenticator app, adds a new account, and taps the “Enter code manually” option.

The user pastes the code into the authenticator app and taps “OK”. Then they name the account and tap on “Done”. The app displays a 6-digit code that the user copies and logs back into the Celsius app. The user then pastes this 6-digit code and taps on “Verify Auth App”.

The next step is checking the email with which the user registered the account and clicking on the “Activate 2FA Now” button. The user will receive a confirmation message and use the 6-digit code to log into their Celsius account.

Users are also advised to be very careful when transferring cryptocurrencies. Once I select my coin on the Celsius app Deposit menu, I use the QR code or copy the address to send assets from my wallet to Celsius. I learned that this is an essential security practice.

Users are warned never to type out addresses manually. Any cryptocurrency sent to the wrong address will be lost. I would adviser Celsius users to utilize QR codes of copy-paste to generate the address, which they should always verify before sending crypto.

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