The yield taxonomy

Junior · enrolled learners

This lesson opens with The Celsius examiner's report, 31 January 2023.

What happened

Shoba Pillay, appointed by the bankruptcy court as independent examiner in the Celsius case, filed a 476 page report, 689 pages with its appendices. Among its findings: Celsius never generated enough profit to pay the rewards it had promised customers, accruing reward obligations $1.36B greater than its net revenue between 2018 and June 2022, and appears never to have been profitable, recording a pre-tax loss of $811M in 2021 during a market-wide advance. It used new customer deposits to fund withdrawal requests in June 2022 and possibly on other occasions. It told customers that its CEL token would be used to pay rewards while concealing the extent to which it repurchased CEL on secondary markets to support the price. Internal messages recorded an employee describing the practice of using customer stablecoins to buy back the company's own token as very Ponzi-like.

The decision point

Customers were told a rate. They were not told the source, and the source turned out not to exist. What makes this a lesson rather than an anecdote is that the question was always answerable and cost nothing to ask: who is paying this, out of what revenue, and what happens to the rate if that revenue stops. Nothing about the answer required access to internal records. It required noticing that no public explanation of the source had ever been given.

Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.

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