Celsius halts withdrawals as pressure mounts on crypto lending platform

Celsius Network halted withdrawals due to “extreme market conditions” as the $ 12 billion digital asset lending platform is under increasing tension as a result of a wide-ranging decline across the cryptocurrency market.

The group has faced increasing pressure in recent weeks as investors flee the market for crypto-yield products, in which traders lend their tokens in exchange for high rates of fixed returns.

Celsius said on Monday that she was “suspending all withdrawals, exchanges and transfers between accounts” to put her “in a better position to honor, over time, her withdrawal obligations.”

The company, founded in 2017, is one of the major players in the crypto industry. Last year it raised $ 400 million in a round of fundraising led by Caisse de dépôt et placement du Québec, Canada’s second-largest pension fund, and WestCap, a fund set up by a former Airbnb and Blackstone executive, Lawrence Tossi.

Celsius’ move has further weakened market sentiment for lending more established digital tokens as collateral to support new cryptocurrencies projects. Last month, Hara and Luna tokens – which were the basis for another popular return platform – Collapsed within days.

The value of the assets deposited on Celsius’ platform has decreased by less than $ 12 billion as of May 17th More than $ 24 billion at the end of December.

CelsiusWhich has offices in the US, UK and Lithuania, said the freeze on customers’ ability to withdraw funds was taken to “benefit our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets”.

“Celsius has valuable assets and we are working diligently to meet our commitments,” the group wrote in a mediocre post announcing the news.

The recent troubles at Celsius have taken a heavy toll on the wider crypto market. Ether, which is considered a proxy for sentiment for digital asset projects that offer investors high returns, dropped one-fifth of its value to trade at $ 1,321, according to Refinitiv data. Bitcoin, the most traded cryptocurrency in the world, has fallen 12% to just over $ 25,000, the lowest level since December 2020.

The group’s currency, recognized by ticker CEL, has lost half its value in the last 24 hours, according to CryptoCompare data.

The platform has faced questions over the past week from customers who have said they are unable to make withdrawals. CEO Alex Mashinsky challenged critics over the weekend to find “even one person who has a problem retiring.”

Another report by William Langley in Hong Kong

Celsius halts withdrawals as pressure mounts on crypto lending platform Source link Celsius halts withdrawals as pressure mounts on crypto lending platform

Related Articles

Back to top button