Celsius Network, one of the biggest crypto lenders, told clients on Sunday evening that it was suspending withdrawals, trades and transfers between accounts in a move that sparked discussions and prompted the token’s price to l ‘business to drop 60% in the past one hour to as little as 19 cents.
“We are taking this action today to put Celsius in a better position to meet, over time, its withdrawal obligations,” wrote Celsius, which counts stablecoin issuer Tether International, the growth equity fund. WestCap Group and the Canadian pension fund Caisse de Dépôt et Placement du Québec among its investors.
“Acting in the interest of our community is our top priority. In service of this commitment and to adhere to our risk management framework, we have activated a clause in our Terms of Service that will allow this process to take place. Celsius has valuable assets and we work diligently to meet our obligations.
Celsius, which was valued at $3.25 billion when it extended its “oversubscribed” Series B funding round to $750 million in November, allows users to deposit their Bitcoin, Ethereum and Tether and receive weekly interest payments. Depending on the time horizon and the token, the platform offers up to 18% interest per year. On its website, Celsius says 1.7 million people call “Celsius their home for crypto.”
The announcement follows one of the cryptocurrency market’s brutal weekends that saw hundreds of millions of dollars in liquidation. At press time, Bitcoin was trading at around $25,585 and Ethereum at $1,346, some of their lowest levels in over a year. Other high-profile crypto projects including Solana, BNB, and FTT were also down.
There must be many users who are in a leveraged position and desperate for those now locked up Celsius funds. I’m sad we got here. Protect yourself.
— Ledger
Prometheus of the Plebs (@ledgerstatus) June 13, 2022
Crypto lenders are under increased scrutiny following the collapse of Terraform Labs’ Luna and its sister token UST last month. Alex Mashinsky, chief executive of Celsius Network, has tried in recent weeks to reassure customers, saying they can withdraw their assets at any time and questioning doubters. The company also recently launched a recurring promotion, offering customers rewards for transferring assets to Celsius accounts and help desks for up to 180 days.
But Celsius has also been struggling with massive sales in recent months. The lender says on its website that it has about $3.8 billion in assets, up from the $24 billion it disclosed at the end of December 2021.
“The beauty of what Celsius has been able to do is that we deliver returns, we pay them to people who could never do it themselves, we take them from the rich and we beat the index. is like going to the Olympics and getting 15 medals in 15 different areas,” Mashinsky said in a video released in December.
Tech
