Total Crypto Market Value Sinks Below $1 Trillion
The total crypto market value has sunk below $1 trillion due to the DeFi platform, Celsius, borrowing too much and juggling client money across risky DeFi protocols and aggregators to provide high returns. They could not pay back the money owed, thus causing investors to abandon ship. Large exchanges have been forced to lay off employees in the midst of the crisis.
DeFi Investors Lose Over 75% Market Value
Decentralized Finance (DeFi) investors have lost over 75% market value due to this recent wave of selling. Celsius Network could be the Lehman Brother’s moment for crypto as they were unable to pay back investors and opted to send out a smoke signal reporting that they were lost at sea. An event that can be seen as the DeFi equivalent of a bank run.
Effective Regulation is Key
Although mistakes are often made, crypto innovators are trying to create something useful. DeFi promises long-term financial gains that can increase value creation for everyone. However, effective regulation is key, as financial services provided by DeFi applications that do not comply with regulations can expose both retail and institutional participants to risks. It is imperative that policy makers act now before the situation becomes untenable.
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