Crypto Lender Celsius Tells Clients to Increase Collateral in Case of Margin Calls

Crypto lender Celsius warned clients in a tweet on Friday they should add crypto to their accounts in the event the lender has to demand additional collateral from borrowers.

In the bitcoin crash of March 2020, several crypto lenders, including Celsius, had to make margin calls in the hundreds of millions of dollars. 

In Friday’s tweet, the lender said clients should be prepared for margin calls because of “market conditions.”

Crypto lending is popular among holders who want to raise cash without selling their coins and market makers who want to fill orders quickly. The phenomenon could potentially improve liquidity and price discovery for crypto assets but it also has introduced systemic risks.

Celsius’ warning comes as crypto coins are almost universally in the red, a drop many attribute to U.S. President Joe Biden’s proposed increase in the capital gains tax.