On Monday, leading cryptocurrency lending platform Celsius announced it would be suspending all withdrawals due to “extreme market conditions”, triggering a major sale in the cryptocurrency market with Bitcoin down more than 9%.
In a blog post On Monday, Celsius said he was “suspending all withdrawals, [currency] swaps and transfers between accounts, “noting that he was doing this to allow himself to fulfill all his withdrawal obligations in the future.
The company said its action “will stabilize liquidity and operations as we take steps to preserve and protect assets” and added that its clients will continue to rack up rewards during the lockout.
Following the announcement, the value of the Celsius (CEL) token plummeted by more than 50% and, as of Monday morning, was trading below 20 cents, down sharply from around $ 2 in early May. and $ 7 in June last year.
Celsius’s announcement also triggered a selloff in the broader cryptocurrency market with Bitcoin briefly below $ 25,000, the lowest level since December 2020.
The suspension of withdrawals comes just a day after Celsius founder and CEO Alex Mashinsky attacked critics on Twitter, accusing them of spreading disinformation and FUD, a popular cryptocurrency acronym for “Fear, Uncertainty, Doubt.” In response to a tweet from Mike Dudas, the founder of crypto news broadcaster The Block, Mashinsky he wrote: “Mike, do you also know a person who has trouble withdrawing from Celsius? … If you get paid for it, let everyone know you’re choosing a side.”
Questions have been raised about crypto platforms like Celsius promising huge returns to their customers following the high-profile collapse of another stable, high-yielding coin, Terra, and its companion token, Luna, last month. According to the Financial Times, Celsius has also been impacted by the general decline in the cryptocurrency market in recent months, with its combined assets falling from a value of $ 24 billion in December 2021 to $ 11.8 billion last month. Celsius runs one of the largest cryptocurrency lending operations in the world and has succeeded raise $ 750 million in funding last year from the likes of investment firm WestCap and Canadian pension fund manager Caisse de dépôt et placement du Québec. Celsius also has loaned $ 500 million from the US dollar-pegged Tether stable currency, down from an originally planned $ 1 billion loan.