Is Celsius Safe? (User Security Review)

is celsius safe

Celsius Network is a cryptocurrency lending platform that seems to have the utmost respect for its customers' security. They take data very seriously and are an extremely transparent company. 

Celsius is a very secure company and follows best practices in the crypto/finance industry. Celsius Network offers crypto loans, and a unique opportunity for users to earn up to 17% APY Not to mention, their CEO Alex Mashinsky is a well-known and trusted tech entrepreneur, responsible for engineering VOIP tehcnology. 

Many people are put off from investing in cryptocurrency because they aren't sure how safe it is. But, as more companies are using cryptocurrency and more exchanges make it available, the public is becoming more accepting of the concept.

But with the increasing rate of data breaches, especially with financial institutions in recent years, it makes sense that people are skeptical to give out their personal information to new companies. Even if they HAVE already bought cryptocurrency in the past.

When it comes to crypto lending, one of the biggest names is Celsius Network. They are aiming to change how people view financial institutions and how people do banking overall. But cryptocurrency lending is still a very new concept. Is Celsius legitimate and safe?

What is Celsius?

Celsius is one of the world's largest cryptocurrency lending platforms. Many people use Celsius specifically for their wallet, which allows users to earn interest off of their crypto assets.

The Celsius Network has a mobile app available on both iOS and Android.

Essentially, it was designed for Crypto HODlers, people who hold their crypto and want to earn passive income from it.

As mentioned, it also at its core is a cryptocurrency lending platform, which is where they make their money. When you borrow with Celsius, they are able to offer very low interest rates on their loans and you can even use your crypto as collateral.

If you're interested in the fees that Celsius charges for their services, be sure to check out this guide to Celsius fees.

Check out our complete Celsius Network Review if you want to know their entire set of features that the network offers.

Is Celsius Network safe to store crypto?

Celsius Wallet is actually an extremely safe place to hold your Crypto. They have a plethora of security features and are constantly transparent with their customers about the business. Which is honestly a breath of fresh air comapred to a lot of their competitors. 

The Celsius mobile app offer Two-Factor authentication when logging into the app, just to make sure that you are the only one who has access to your account.

Additionally, you are also are notified via email when a new wallet has been used for a withdrawal in your account. Which, some users think is annoying but it's actually a very useful security feature. You would know this if you've been the victim of an attack or identity theft in the past.

This makes sure that you and only you are using your Celsius account and makes it more difficult for hackers to withdrawal assets.

The customer support team responds usually within hours but sometimes falls behind and definitely could use an improvement per some customer reports. However, they do have a support team working 24/7 to deal with serious issues. 

They are extremely transparent with their customers by providing AMA's on Reddit and YouTube, and staying active on Twitter. Celsius Netowrk also even offer a list of the top 500 holders of CEL Token (their native token) right on their website. Cel Tokens are the crypto promoted by Celsius Network.

You should be aware of the "not your key, not your coins" argument, which means if you don't hold direct access to your crypto with the digital private key to your wallet, it's technically not your money. Which is a fair argument, but humans always need to depend on financial institutions to some extent.

You aren't going to keep your savings under your own mattress. So some might say that argument is outdated. But having your own private keys is definitely helpful.

So this risk comes with pretty much any third party wallet or trading platform that you decide to use for cryptocurrency investing or trading.

One user on Reddit, ProphetPicks had asked an important question regarding the safety of the Celsius Network:

How safe is Celsius? How to avoid ending up like KuCoin or falling victim to coins being hacked?

I think the website looks great, notable CEO, and I personally believe in the project but I have my doubts...

ProphetPicks

Reddit user

One user on Reddit, thegoldlust listed 8 specific reasons to trust the Celsius Network:

  1. It's not possible to withdraw coins from the Celsius system to non-whitelisted addresses. So even if hackers get in, they can't make the money "disappear" into a coin tumbler or a wallet in an unreachable place like North Korea.
  2. No single person can approve large withdrawals. 2 or more people are always required to confirm large withdrawals.
  3. Devices like UBIT tokens are required for employees to "log into" the Celsius system. This also means employee actions are monitored. I.e. Everything people do at the company that is somehow relevant to coins is recorded for the purpose of preventing or tracking "bad" behavior.
  4. Data is protected by MPC.
  5. Accounts are monitored for anomalous behavior. E.g. An IP address trying to access your account from a different country than where you normally log in from.
  6. Employees practice what to do during security breaches. I.e. Conducting "readiness" drills ("tabletop exercises").
  7. Specialists like FireBlocks, BitGo and Onfido provide storage and KYC services.
  8. Not to lend > 5% of available coins to any single client. They also audit the finances and security practices of their clients to make sure they're not lending to someone who's going to get hacked or go bankrupt.

Thegoldlust

Reddit user

These are all unique security features that Celsius Network practices to make sure that their platform continues.

As mentioned above, they don't have a direct insurance policy but they partner with specialist FireBlocks, their custodian provides insurance on all the digital assets that are held by the network.

Celsius also requires 2 or more employees to approve large withdrawals, meaning they have a very strict process to make sure no risky activity or unwanted withdrawals are happening.  

They also make sure that you are notified via email of a new withdrawal address added 24 hours before a withdrawal can actually occur. This is a great feature, and while some might be inconvenienced by it, it's ultimately for the best.

Celsius Network employs Anti-money laundering experts and conduct readiness drills and regular practices of what employees would do in the actual event of a security breach.

Additionally, when users choose to borrow with Celsius, they never lend more than 5% of the available coin to a single client, this makes sure that they have a stable amount of crypto for everyone to borrow.

They perform regular checks on user activity to make sure nothing is being used for malicious purposes. 

Data is stored using MPC or multiparty computation, meaning that neither party can view data from the other party.

 
 

Sign up for Celsius, click or use this code: 1529325918

We both get $50 in BTC when you deposit over $400 or more and hold it for 30 days


Celsius Statistics

Celsius can be trusted do to the sheer transparency that they have. They share many statistics so that new users can feel secure with unbanking themselves with the Celsius Network.

As of November 2021, Celsius Network has:

  • Over $27.5 Billion + in assets 
  • 1 million+ users
  • Paid customers over $1 Billion in rewards and yields since the launch of Celsius in 2018
  • 109k+ Community BTC shared with users.
  • Celsius is registered with FinCEN in the US 
  • Provided 24/7 customer service
  • Has customers in over 150+ countries

They also take security compliance very seriously and have a dedicated team of Anti- Money Laundering professionals working hard to discover any suspicious activity on their platform.

As mentioned they are very focused on transparency, which can definitely make you trust them a lot easier than other companies.  

They provide very in-depth interviews and podcasts on their YouTube Channel. And CEO Alex Mashinsky also does very frequent AMA's about the business side of Celsius.

Honestly, this type of transparency is refreshing to see in the crypto industry, especially in light of Coinbase's recent compromise.

FAQ

Many people are just naturally skeptical when using a new company to trust their crypto investments with. And rightfully so, the amount of data leaks and attacks on financial institutions has been more and more frequent, especially with the rise of cryptocurrency.

Has Celsius Network been hacked?

No, Celsius network has not reported a direct hack. 

However, they have partnered with Japan-based exchange Liquid, who experienced a hack of their hard storage wallets last year.

This means that Celsius is obviously prone to a hack, just like any cryptocurrency platform. However, keep in mind the practices mentioned earlier in this article. Celsius does take action to prevent these events from happening.

Is Celsius safer than BlockFi?

Celsius is more trusted than BlockFI, as they have more assets and more active users as well. BlockFi has only reported 1 major security breaches, and no lost data though. So when it comes to protecting your assets against hackers, the two competitors come very close.

When it comes to competitors like Coinbase, Celsius is a good choice for some, but not for others. For example, if you are actively trading cryptocurrency, a trading platform like Coinbase will be a no-brainer

On the other hand, if you are looking to earn passive income on your crypto, a cryptocurrency lending platform is a great place to decide to store your coins with. 

What are Celsius Networks' fees?

When you use Celsius network borrow currency or stablecloin, they have some of the lowest interest rates in the industry.

The Celsius Wallet has zero fees. Zero origination fees, early termination fees, transaction fees, withdrawal fees, etc. However, if you choose to purchase cryptocurrency with the Celsius Network, you may have to incur some fees through their third party partners.

Celsius network fees definitely make it stand out compared to it's competitors. People who trade actively need to incur a variety of fees, which is why Celsius is better than Coinbase for people who just want to hold their crypto.

For a more detailed explanation of Celsius Fees, check out this page.

What are the Yield rates for keeping crypto in your Celsius Wallet?

As mentioned, one of the most popular uses of the Celsius Network is the fact that they offer weekly rewards and yield rates on the crypto that you keep in your wallet.

In other words, once you deposit cryptocurrencies in your wallet on the Celsius App, you can make money and start earning interest off your assets just by keeping them in your account.

Below is a list of some of the current rates for popular crypto:

Crypto

Yield Rate

BTC (Bitcoin)

6.2% upto 1 BTC

LTC (Litecoin)

4.08% 

ETH (Ethereum) 

5.35% up to 100 ETH

ETC (Ethereum Classic)

3.00%

If you need more info on the rates involved, check out the link above for more info.

What is CEL Token?

CEL Token is the native token (or utility token) that Celsius offers.

If you hold a certain percentage of Celsius in your account, you get better weekly rewards on your yield rates and you also get access to better a loan interest rate if you choose to borrow with Celsius.

They have a whole tier list of loyalty tiers depending on how much CEL Token you hold in your account.

 
 

Sign up for Celsius, click or use this code: 1529325918

We both get $50 in BTC when you deposit over $400 or more and hold it for 30 days


Is Celsius Legit?

Celsius is a reputable company that abides by regulations in the countries that it operates. It is run by trusted and transparent professionals who provide updates about the business to users. 

The company started out in 2017. In August 2021, they announced that the total worth of assets under their management surpassed $20 Billion. The company has also paid out over a billion dollars in rewards and yields to users. So yes, Celsius is legit.

They have paid out over a billion dollars in rewards since 2018, so yes, they are legit and safe.

It's extremely easy to borrow USD or any stablecoin using Celsius Network and putting your crypto up as collateral. You can also choose your loan amount and even start paying back the loan as you continue to earn APY rewards on the crypto in your wallet. 

Conclusion on Celsius

Celsius Network is one of the easiest to use mobile apps for cryptocurrency lending. They also offer some of the best interest rates in the industry and offer a very secure platform for people. Not to mention, the wallet is great for holders of cryptocurrency who are looking to make extra passive income from their crypto investments.

For more information on Celsius, check out our complete Celsius Network Review

celsius logo

Celsius Network

Celsius

Celsius is ideal for those who are holding their cryptocurrency or digital assets for the long-term. They are a very secure platform and employ a team of experts to make sure data is safe from attackers and funds are kept where they are supposed to be.

Safety

Never been hacked, is very transparent and provides educational resources. Alex Mashinkshy is a trusted and respected name.

Overall

No fees. Looking to provide financial security for users in a modern world.

About Crypto Ryan 64 Articles
Hi, I'm Ryan. I started investing in cryptocurrency in early 2014. Naturally, I want everyone to have the chance to learn about the crypto world so I created this blog! I hope my articles help you understand blockchain and cryptocurrency. Cheers!