Michael Hiltzik: Shame, suicide attempts, 'financial death' — the devastating toll of a crypto firm's failure
In September last year, Alex Mashinsky was riding high.
Appearing on a panel sponsored by Johns Hopkins University to talk about bitcoin and other cryptocurrencies, Mashinsky, the chief executive of the crypto banking firm Celsius, exuded confidence about the future of crypto and disdain for traditional banks and traditional currencies.
"The banks have abused their power," Mashinsky said, citing the discrepancy between the interest that banks pay on dollar deposits — an annualized rate of less than 1% — and the nearly 9% that Celsius paid on deposits of some digital currencies. "Is the real value of money 0.1%?" he asked. "Or is the real value of money ... 8.8%?"
To hundreds of Celsius' 1.7 million customers, the value of the $11.7 billion in assets they deposited with the firm might as well be zero.
"Mashinsky always talked very confidently about how strong Celsius was and how much better than banks," recalls Harold M. Lott, 35, a Nashville-area nurse who had as much as $14,000 in cryptocurrency assets deposited at Celsius at the peak of the crypto
