Coins are held with our custodian, BitGo, and are lent out to hedge funds/exchanges/institutional traders. Any time your coins are lent out, up to 150% of the value is provided as collateral (typically USD). For a more in-depth security review, check out this article that one of our community members wrote up. https://trybe.one/celsius-network-how-secure-are-your-assets/
You can learn more about BitGo here: https://www.bitgo.com/services/custody