Celsius Network, one of the largest crypto lenders, told clients late Sunday that it is pausing withdrawals, trades and transfers between accounts in a move that sparked discussions and caused the company’s token price to drop 60% in the past. an hour at only 19 cents. “We are taking this action today to put Celsius in a better position to meet its retirement obligations over time,” wrote Celsius, which has stablecoin issuer Tether International, growth equity fund WestCap Group and the Canadian pension fund Caisse de DĂ©pĂ´t et Placement. du QuĂ©bec among its investors. “Acting in the interest of our community is our highest priority. In service of that commitment and to comply with our risk management framework, we have activated a clause in our Terms of Use that will allow this process to take place. Celsius has valuable assets and we are working diligently to meet our obligations.” Celsius, which was valued at $3.25 billion when it expanded 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 that 1.7 million people call “Celsius their home for cryptocurrencies.” The announcement follows one of the brutal weekends in the cryptocurrency market that saw hundreds of millions of dollars worth of liquidations. 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 also fell.
There must be many users who are in a position of leverage and desperately need those now-locked Celsius funds. I’m sad that we got here. Protect yourselves. — Ledger 🇺🇸 Prometheus of the Plebs (@ledgerstatus) June 13, 2022
Crypto lenders are facing increased scrutiny following the collapse of Terraform Labs’ Luna and its sister token UST last month. Alex Mashinsky, CEO of Celsius Network, has been trying to reassure clients in recent weeks, saying they can withdraw their assets at any time, and questioned skeptics. The firm also recently launched a recurring promotion, offering clients rewards if they transfer assets to Celsius accounts and help positions for up to 180 days. But Celsius has also dealt with high sell-offs in recent months. The lender says on its website that it has about $3.8 billion in assets, up from $24 billion it disclosed at the end of December 2021. “The beauty of what Celsius managed to do is that we deliver performance, you get it. we pay people who will never be able to do it themselves, we take it from the rich and beat the index. That’s like going to the Olympics and getting 15 medals in 15 different fields,” Mashinsky said in a video broadcast in December.
