Kathleen Breitman, co-founder of decentralized layer 1 blockchain Tezos said the bankruptcy filing of troubled crypto lender Celsius Network is not surprising as such business models are unsustainable in the long run.
Celsius filed for Chapter 11 Voluntary Bankruptcy exactly one month after suspending withdrawals due to a liquidity crunch.
Breitman said in a recent interview with Bloomberg: “For those in the industry for a while, it's absolutely no surprise that Celsius will go bust because economics has laws that transcend blockchain, as opposed contrary to popular belief”.
According to the co-founder of Tezos, some recent events in the crypto industry are difficult to predict. She noted the case Three Arrows Capital's default leaves "only one".
Three Arrows Capital is one of the largest venture capital (VC) firms in the crypto space. The company has supported many leading blockchain projects and startups, including Ethereum, BlockFi, Polkadot, Solana, and Terra LUNA.
Three Arrows Capital (3AC) began to face financial challenges following the catastrophic collapse of the Terra blockchain in May. The hedge fund's inability to respond to margin calls from lenders resulted in a forced tie. must be liquidated from BlockFi.
While several crypto companies are facing the financial crisis Breitman believes these are moves away from "things that don't work".
“You really cannot create a protocol or sustainable business based on the theory that the numbers will always go up, that is the risk model,” she concludes.