Crypto lender Celsius freezes withdrawals due to “extreme market conditions;” 1.7 million crypto holders affected
Celsius Network, one of the largest players in the crypto lending space, said Monday it was freezing all withdrawals and transfers for all of its 1.7 million crypto customers due to what the crypto startup described as “extreme market conditions.”
The cryptocurrency lending platform offers crypto investors higher-than-average interest rates on their deposits. As of May, Celsius has more than $8 billion lent out to clients and almost $12 billion in assets under management, its website said, down by more than half from October, and had processed a total of $8.2 billion worth of loans.
In a memo to clients on Monday, the company said: “Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts.”
Immediately after the announcement, Bitcoin plummeted to an 18-month low of $23,476. No.2 token ether dropped as much as 16% to $1,177, its lowest since January 2021.
In a blog post, the company also said it had frozen withdrawals, as well as transfers between accounts, “to stabilize liquidity and operations while we take steps to preserve and protect assets.”
“We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations,” the New Jersey-based company said.
Mashinsky, the CEO, was quoted in October last year saying Celsius had more than $25 billion in assets. The company’s website, which urges customers to “Earn high. Borrow low,” said it offers interest rates of up to 18.6%.
Founded in 2017 by Alex Mashinsky and S. Daniel Leon. It lets you earn interest on your crypto and instantly borrow against it. That startup has built the next generation of decentralized lending and borrowing products leveraging cryptocurrency. Celsius Network addresses the financial needs of today’s consumers worldwide through a high-interest income and low-cost lending accessible via a mobile app.
“We are writing with a very important message for our community.
Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts. We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.
We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets. Furthermore, customers will continue to accrue rewards during the pause in line with our commitment to our customers.
We understand that this news is difficult, but we believe that our decision to pause withdrawals, Swap, and transfers between accounts is the most responsible action we can take to protect our community. We are working with a singular focus: to protect and preserve assets to meet our obligations to customers. Our ultimate objective is stabilizing liquidity and restoring withdrawals, Swap, and transfers between accounts as quickly as possible. There is a lot of work ahead as we consider various options, this process will take time, and there may be delays.
We thank the incredible Celsius community for your support today. It is our pleasure to serve you. Our operations continue and we will continue to share information with the community as it becomes available.
The Celsius team”