Celsius Network, one of the largest crypto lenders, told customers on Sunday night that they are stopping withdrawals, exchanges and transfers between accounts in a move that has sparked discussions and caused the price of the company’s token to fall by 60% earlier. an hour to as low as 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 counts stackcoin issuer Tether International, growth fund WestCap Group and Canadian pension fund Caisse de Dépôt et Placement du Québec among its investors.
Celsius, which was valued at $ 3.25 billion when it expanded its “oversubscribed”[ads1]; Series B funding round to $ 750 million in November, allows users to deposit Bitcoin, Ethereum and Tether and receive weekly interest payments. Depending on the time horizon and token, the platform offers as much as 18% interest per year. On its website, Celsius says that 1.7 million people call “Celsius’ home crypto.”
The announcement follows one of the brutal weekends in the cryptocurrency market that was liquidated for hundreds of millions of dollars. At the time of publication, 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.
Crypto lenders are facing increased scrutiny following the collapse of Terraform Labs’ Luna and sister token UST last month. Alex Mashinsky, CEO of Celsius Network, has been trying to reassure customers in recent weeks, saying they can withdraw their assets at any time and questioned skeptics. The company also launched a recurring campaign recently, offering customers rewards if they transferred assets to Celsius accounts and auxiliary positions for up to 180 days.
But Celsius has also struggled with high sales in recent months. The lender says on its website that it has around $ 3.8 billion in assets, down from the $ 24 billion it revealed at the end of December 2021.
“The beauty of what Celsius managed to do is that we deliver returns, we pay it to people who would never be able to do it themselves, we take it from the rich, and we beat the index. It’s like going to the Olympics and getting 15 medals in 15 different fields, Mashinsky said in a video streamed in December.