Wednesday, October 5, 2022

Crypto Lender Celsius Halts Withdrawals, Here’s Why

For reasons bordering on the prevalent “extreme market conditions,” crypto lending services platform Celsius is halting withdrawals with immediate effect. It made the announcement via a blog post in the early hours of Monday. 

Additionally, the company will also be halting its swap and transfer products in the meantime. However, it does not state clearly how soon withdrawals could be expected to resume.

Celsius Aiming To Meet Up With Customer Obligations 

According to the blog post, Celsius says there is a lot of work to do, but the aim has always been simple. It says protecting and preserving assets in order to meet its obligations to customers is core to its existence as a firm. And for this, the crypto lender will consider various options in restoring withdrawals but admitted that delays may occur. Part of the post read:

“Our ultimate objective is stabilizing liquidity and restoring withdrawals, Swap, and transfers between accounts as quickly as possible.”

This new announcement follows after Celsius recently tightened its policies around funds transfer.  It has claimed that unregistered investors may no longer transfer funds. Also, the company just replaced its Chief Financial Officer, following the arrest of former CFO Yaron Shalem. Salem was arrested in 2021 by the Israeli police.

CEL Token Falls Over 50%

Shortly after reports about withdrawals being paused filtered through, the price of Celsius’s CEL token fell by over 50%. At press time, CEL is trading at $0.1938, per CoinMarketCap data.

It should be noted that these times are certainly not the best of times for the Celsius network. The company also recently had some run-ins with regulators, causing law enforcement bodies to issue cease-and-desist orders against it.

For some reason, Celsius has also reportedly transferred no less than 104,000 ETH to FTX within the last three days. The news was broken by crypto reporter Colin Wu, via his Twitter handle @WuBlockchain. And while the company has reassured that withdrawals will return, some users are already panicking if this is another “Terra crash” in the making.

 

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