The wider world · 86 / 90 · 3 min
Interest
Someone is paying you to leave the money with them. Name them before you call the number income.
Interest is a fee paid so someone else can use the money. A high number still has to name its payer.
A worked case
A firm offers a reward far above a bank for leaving coins with them. The reward is paid while new deposits arrive and the bets they made still work. The bets fail. The reward stops. The number had been a poster. The payer was the risk.
Who pays
A bank pays you because a borrower pays the bank more. The gap is the business. You are the funding, not the guest of honour.
A firm in this world can print a larger number on the same shape and call it a reward. The word does not make it a savings account. If you cannot say what they do with the coins, you cannot say who is paying you.
When the number stops
A high rate means someone needs the money badly, or a subsidy is filling the gap. Subsidies end. Borrowers fail. The poster does not become a debt they still owe you.
Name the payer. Then decide. This page will not pick the rate.
Celsius, a rate, and then a creditor
Celsius Network took customers' coins and paid a reward that looked like interest. The rates were the advert. The company used the coins. In June 2022 it froze withdrawals. On 13 July 2022 it filed for bankruptcy in New York. People who thought they held a deposit found themselves described, in the insolvency, as creditors of a firm that could not pay them on demand.
A bank's interest has a boring shape: the bank lends your deposit, the borrower pays more than you receive, and a deposit guarantee may cover a slice if the bank fails. Celsius was not that shape. The high number was the clue that someone was paying a lot, or taking a risk a savings account does not take. When the bets failed, the payer stopped, and the freeze was already in place.
The course does not pick a rate for you. It asks you to name the payer before you treat the number as income. A subsidy, a borrower, or a trading desk are different payers. If the document never says which, the line stays empty. The SEC's later case against Celsius and its founder describes the firm as having raised billions by offering interest without the registration those offers required. The case is about the offer. It does not make a high rate safe, and this page is not advice about any yield.
Read it yourself
These links are the record. They are not a recommendation, and they are not instructions. A news story or a court paper can still be wrong about a detail. The check does not change because a famous name is in the story.
Apply the check
Open a question. The line is about this topic. It is not a verdict that anything is safe.
Whoever uses the money, minus what they keep. A subsidy, if the use does not cover the rate.
The payer. They can cut the rate. A bank's terms can too.
The payer stopping. A freeze, if they hold the coins while they decide.
Check yourself
Write it in your own words. The course's answer opens after that. Nothing is sent.
After this you can name who pays a rate, and what you are if they stop.