Crypto lender Celsius warned clients in a tweet on Friday that they should add crypto to their accounts in the event that 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.
In Friday’s tweet, the lender said that clients should be prepared for margin calls “[d]ue to 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 as crypto coins almost universally are in the red, a drop many attribute to U.S. President Joe Biden’s proposed increase to the capital gains tax.
