Another One Bites the Dust: Last Day to Deposit to Celsius to Earn Interest for US Users; Consider Gemini Earn & Hodlnaut!


And another one gone, and another one gone, another one bites the dust....

Celsius notified its US users a couple of days ago that any deposits received from unaccredited investors on April 15 or after would be put into a non-interest bearing "custody account." Celsius is billing it as a "custody solution." So, for many users, today is the last day to deposit and be able to earn interest on that deposit. 

Celsius is making this change due to pressure from the SEC. The SEC seems to be viewing these interest-bearing accounts as securities; as the digital assets are essentially handed over by the terms of service of CEFI providers, the owners of the accounts are like the owners of debt instruments, having lent to the CEFI provider. 

BlockFi and Nexo have faced similar pressure from the SEC and taken similar moves. In February, BlockFi paid fines amounting to $100M, with $50M going to the SEC and the rest split among 32 US States, and ceased paying interest to US users. Nexo also stopped paying interest to US users in February, ostensibly to avoid a similar fate.  The SEC seems to be targeting the biggest CEFI providers.

To be clear, Celsius will still pay interest on deposits received before April 15 (and compound that interest), but this could be a giant step towards cutting US users off like BlockFi and Nexo before them. US users have less and less options for CEFI. DEFI is certainly an alternative, but comes with its own set of risks. 

Alternative CEFI Options

Gemini Earn

I personally like Gemini Earn and Hodlnaut. Gemini pays lower interest rates but seems to be much lower risk. They mainly lend to one client, Genesis. In addition to the Earn product, it's also a great exchange with low fees (albeit with a smaller selection of coins) and 10 free withdrawals per month. Gemini Earn is pretty diverse, with coins like GRT that aren't on Celsius or Nexo. Gemini is based in New York. While that provides safety, it could be on the SEC's list.

New users can get $10 in BTC: https://gemini.com/share/dy4wm5ahl

Hodlnaut

For higher rates (similar to those of Celsius), Hodlnaut has been a great option. They are Singapore based (with a Hong Kong subsidiary for international clients) and have a much smaller AUM than Celsius, but are growing rapidly; that smaller AUM could make them less likely to be targeted by the SEC (though they have to contend with Singapore law as well). They had been paying higher rates than the competition and had a great affiliate program to attract new users, but have recently ended the program and come down to market rates to ensure a sustainable business model. Hodlnaut also offers swaps without fees (but with a small spread). It's mainly limited to BTC, ETH, and stablecoins and offers 1 free withdrawal per month. 

New users can earn 30 USDC sign-up bonus when you deposit USD1,000 worth of any asset and hold for 31 consecutive days: https://www.hodlnaut.com/join/Z3F-tHFWc

Referral Codes:

Crypto Exchanges and CEFI:  

Hodlnaut ($30 in USDC): https://www.hodlnaut.com/join/Z3F-tHFWc

Gemini ($10 in BTC):. https://gemini.com/share/dy4wm5ahl

Celsius ($50 in BTC): https://celsiusnetwork.app.link/142928a808

Nexo ($25 in BTC): https://nexo.io/ref/buu2fi46dt?src=android-link

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