Cryptocurrency-lending platform Celsius freezes withdrawals as Bitcoin hits 18-month low

What simply occurred? The crypto trade took one other blow yesterday when The Celsius Community, one of many largest cryptocurrency lenders, informed its 1.7 million prospects that it was pausing all withdrawals, swaps, and transfers between accounts because of “excessive market circumstances.” The information comes as Bitcoin and Ether crashed to their lowest costs in over a yr.

Following one other turbulent weekend for the most important cryptocurrencies, Celsius introduced it was freezing account withdrawals and transfers. “We’re taking this mandatory motion for the good thing about our complete neighborhood with a purpose to stabilize liquidity and operations whereas we take steps to protect and defend belongings,” it wrote. The corporate by no means mentioned when prospects may count on to make withdrawals once more.

There are reviews that Celsius transferred $320 million value of crypto to the FTX change proper earlier than saying the account withdrawal/switch freeze.

The decentralized finance (DeFi) platform operates by amassing buyer deposits that it loans out to others to earn a return. Final yr, Celsius managed to lift $750 million in funding from traders that included Canada’s second-largest pension fund, Caisse de Dépôt et Placement du Québec (CDPQ), regardless of the shortage of FDIC authorities insurance coverage safety and warnings that the operation is not any completely different from a Ponzi scheme.

The Celsius Community has hardly ever been removed from controversy. The Wall Avenue Journal reviews that it stopped providing interest-bearing accounts to US-based nonaccredited traders in April following regulatory strain. The corporate was additionally the topic of a cease-and-desist order from New Jersey final yr, and its CFO was suspended after being arrested in Israel in November on cash laundering, fraud, and sexual assault expenses referring to his earlier job. Some say it additionally performed an element within the collapse of Terra, which finally wiped virtually $1 trillion off the worth of crypto markets, however Celsius denies this.

The Celsius Community’s web site claims the corporate had processed $8.2 billion value of loans and managed $11.8 billion in belongings as of Might 17.

On the time of writing, Bitcoin is at $25,295, its lowest value since December 2020, whereas Ethereum is at $1,310, a low it hasn’t seen since January final yr.

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