Please take precautions to prevent becoming one of the 1.7 million Celsius clients who are currently dealing with significant losses if you’re thinking about purchasing cryptocurrency or using a cryptocurrency site that offers interest.
1. Never assume a cryptocurrency exchange is as secure as a bank
The FDIC insures bank accounts, as was previously mentioned, providing up to $250,000 per qualified account in protection for your funds. While some cryptocurrency exchanges claim to have FDIC insurance on deposits of US dollars, this insurance does not apply to stablecoins or other crypto assets.
Strict guidelines must be followed when it comes to what banks and brokerages can do with customer deposits. As opposed to this, according to research from Arkham Intelligence, Celsius appears to have managed a notable portion of its assets more like a hedge fund than a bank, investing deposits aggressively in the crypto markets rather than lending them out in a low-risk manner to sophisticated institutions.
2. Go over the terms and conditions
It is not enjoyable at all to wade through the legalese of terms and conditions. However, businesses can conceal a variety of things in these documents. You might be handing away your rights in the lawless realm of cryptocurrencies. The existence of those tedious documents could mean the difference between retaining your money and losing it if the worst happens and the crypto platform fails.
Pay close attention to ownership specifics. Customers unwittingly consented to give the platform ownership of their assets in the case of Celsius. Similar provisions are found on other crypto loan services. Find a platform where your valuables are protected.
3. Never invest more money than you can afford to lose.
Your life savings should not be invested in any kind of cryptocurrency or cryptocurrency platform. It is not the same as having U.S. dollars in a bank account, even if the stablecoin is pegged to the dollar. Cryptocurrency systems can also fail in addition to any cryptocurrency’s value being able to reach zero.
There isn’t a secure cryptocurrency investment available at the moment. Don’t borrow money to purchase cryptocurrency and don’t invest money you can’t afford to lose. Additionally, you should make sure that you possess a variety of assets. If you have cryptocurrency in your portfolio along with other investments like equities, cash, and real estate, the failure of one project won’t cause you to fall into financial ruin.