Crypto lender Celsius pauses withdrawals, transfers citing ‘extreme market conditions’ – TechCrunch

Celsius Network, one of the largest cryptocurrency lenders, told customers Sunday night that it is pausing withdrawals, swaps and transfers between accounts in a move that has sparked debate and caused the price of the company’s token to fall by 60% in the past. . an hour to just 19 cents.

“We are taking this action today to put Celsius in a better position to meet its withdrawal obligations over time,” wrote Celsius, which includes stablecoin issuer Tether International, growth equity fund WestCap Group and Canadian pension fund Caisse de Dépôt. and Placement counts. du Québec among its investors.

“Acting in the best interests of our community is our top priority. In service of that commitment and to adhere to our risk management framework, we have activated a clause in our terms of use that enables this process. Celsius has valuable assets and we are working hard to meet our commitments.”

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 a whopping 18% interest per year. On its website, Celsius says that 1.7 million people call “Celsius their home for crypto”.

The announcement follows one of the brutal weekends in the cryptocurrency market that saw hundreds of millions of dollars in liquidation. At the time of publication, Bitcoin was trading at around $25,585 and Ethereum at $1,346, some of their lowest levels in more than a year. Other high-profile crypto projects, including Solana, BNB, and FTT, were also unavailable.

There must be a lot of users who are in a position of leverage and who desperately need funds from Celsius, now locked up. I’m sorry we ended up here. Protect yourself.

— Ledger 🇺🇸 Prometheus of the Plebs (@ledgerstatus) June 13, 2022

Crypto lenders are under closer scrutiny following the collapse of Terraform Labs Luna and its sister token UST last month. Celsius Network chief executive Alex Mashinsky has spent the past few weeks trying to reassure customers by saying they can withdraw their assets at any time and questioned skeptics. The company also recently launched a recurring promotion, offering customers rewards when they transfer assets to Celsius accounts and assist positions for up to 180 days.

But Celsius has also been experiencing high sell-offs in recent months. The lender says on its website that it has about $3.8 billion in assets, down from $24 billion disclosed in late December 2021.

“The great thing about what Celsius has been able to do is we deliver revenue, we pay it to the people who could never do it themselves, we take it from the rich and we beat the index. That’s like going to the Olympics and getting 15 medals in 15 different fields,” Mashinsky said in a video that aired in December.

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