Captain’s note
- The CFTC says Celsius froze customer withdrawals on June 12, 2022 and filed for bankruptcy on July 13, 2022, with liabilities exceeding assets by more than one billion dollars.
- The FTC says Voyager customers were locked out of their cash accounts for more than a month and lost more than $1 billion in crypto assets.
- The SEC found that BlockFi made a false and misleading statement for more than two years about the level of risk in its loan portfolio and lending activity.
Crypto lending had its first full crisis in 2022. Platforms that let people earn interest on crypto and borrow against it froze accounts within weeks of each other, and customers found out that their coins were not where they thought. Regulators spent the next years in court. Their findings are the clearest record of what can go wrong with a crypto lender, and they apply to anyone weighing a loan today.
Celsius
Celsius marketed interest-bearing accounts, personal loans secured by customers’ crypto deposits and a crypto exchange. According to the FTC, its executives told customers they could withdraw at any time, that the company had a $750 million insurance policy for deposits, that it had enough reserves to meet its obligations, and that the Earn program could pay as much as 18 percent annual percentage yield. They also claimed the company made no unsecured loans.
The FTC says those promises were false. Celsius took title to and misappropriated customer deposits totaling more than $4 billion, used them to fund operations, pay other customers and make high-risk investments, and made unsecured loans totaling $1.2 billion as of April 2022. It had no such insurance policy, and until mid-2021 no system to track its assets and liabilities.
The CFTC, in what it called its first case against a digital asset lending platform, says customers deposited approximately $20 billion with Celsius. In May 2022 the founder said Celsius had billions of dollars in liquidity; on June 12, 2022 Celsius froze withdrawals, and on July 13, 2022 it filed for bankruptcy, with liabilities exceeding assets by more than one billion dollars. Its former CEO pled guilty to commodities fraud and securities fraud on Dec. 3, 2024 and was sentenced on May 8, 2025 to 12 years in prison.
Voyager
Voyager told customers their deposits were safe, and its marketing included the line “YOUR USD IS FDIC INSURED”, according to the FTC. Voyager was not a bank, the FDIC does not insure crypto assets at all, and customers’ cash was protected only if Voyager’s partner bank failed. The company removed the claims only after a cease-and-desist letter from the FDIC.
In June 2022 Voyager’s CEO wrote that customers’ funds were “as safe with us as at a bank.” Two weeks later the company froze access to accounts, and it filed for bankruptcy in July 2022. The FTC says customers were locked out of their cash accounts for more than a month and lost more than $1 billion in crypto assets, including money saved for tuition and home down payments.
BlockFi
BlockFi’s case came before the collapses. In February 2022 the SEC charged BlockFi Lending with failing to register the offers and sales of its retail crypto lending product, the BlockFi Interest Account, through which investors lent crypto to BlockFi for a variable monthly interest payment. BlockFi agreed to a $50 million penalty and another $50 million in fines to 32 states. The SEC also found that BlockFi made a false and misleading statement on its website for more than two years about the level of risk in its loan portfolio and lending activity.
How it ended for customers
| Celsius | Voyager | |
|---|---|---|
| Withdrawals frozen | June 12, 2022 | Two weeks after a June 2022 letter to customers |
| Bankruptcy filed | July 13, 2022 | July 2022 |
| FTC settlement with the company | Permanent ban on handling consumers’ assets; $4.7 billion judgment suspended | Permanent ban on handling consumers’ assets; $1.65 billion judgment suspended |
| Why suspended | So remaining assets could go to consumers in bankruptcy | So remaining assets could go to consumers in bankruptcy |
The individuals were pursued separately. In July 2026 the FTC announced that Celsius’s three co-founders would pay a total of $16.5 million and accept bans on marketing products used to deposit or withdraw assets. The CFTC cautions that orders requiring repayment may not always result in recovery, because wrongdoers may not have the money.
The warning signs
- Claims of being safer than a bank. The FTC quotes Celsius saying “we have much less risk”.
- Insurance claims for crypto deposits. Neither Celsius’s policy nor Voyager’s FDIC coverage existed as advertised.
- Yields far above bank rates, paid from lending customers’ deposits.
- Vague answers about what happens to your coins, and the right to use them in the terms.
- Reassurance from executives as conditions worsen. Both companies made it days or weeks before freezing accounts.
Tip: The safest lender in a marketing video is not evidence of anything. Look for the custody terms, the liquidation rules and the regulator’s press release page instead.
How to turn these lessons into questions for a lender is covered in How to Compare Crypto Lenders: A Checklist Built From Regulators’ Warnings and Custody and Rehypothecation: What Happens to Your Collateral.