Now employees may be facing legal consequences after committing fraud in an attempt to contain the firm's troubles, according to the analysts who blew the whistle on liquidity crisis concerns.

What Happened: Users took to Twitter Inc. (NYSE:TWTR) to discuss the possible fallout for Celsius. 

CryptoJoe, the pseudonymous crypto Twitter personality who took part in the research revealing Celsius' illiquidity, said: "Celsius members could face jail time given the nature of this debacle."

Blocking margin repayments would constitute a form of financial fraud if users are not compensated for liquidations that they could not avoid due to the restrictions imposed by the company, he said. 

CryptoJoe and his fellow on-chain analyst Riley said that while the company claims to have about $10 billion of total value locked on the platform, they were only able to find $2 billion through their on-chain analysis.

Still, they pointed out that such analysis cannot uncover coins held in centralized finance services such as crypto exchanges, and their analysis is not guaranteed to have uncovered all of Celsius' holdings.

They added in a joint statement:

"Whether or not their assets meet their liabilities to the full extent is a difficult question to answer in certainty, given the opaqueness of reporting."

What's Next? The two also expect that Celsius is likely to become a forced seller of stETH, further lowering its price compared to the Ethereum (CRYPTO: ETH) to which it holds the keys.

According to CryptoJoe and Riley, multiple Celsius competitors could face pressures if a continued downturn causes liquidations in the crypto market to increase further.