Binance halted bitcoin withdrawals on Monday hours after cryptocurrency lender Celsius blocked customers from withdrawing funds from its moving platform that spurred broad selling in the digital asset market.
Bitcoin, ether and other major chips fell sharply on Monday after a turbulent weekend as the market infrastructure underpinning the digital asset market showed signs of worsening tensions.
Binance, the world’s largest cryptocurrency exchange, suspended bitcoin withdrawals from customers on Monday afternoon. The pause came after Celsius, another major player in cryptography that allows users to lend their tokens for high returns, stopped trading due to “extreme market conditions.”
The cryptocurrency market has been shaken in recent weeks amid a wider flight of speculative assets caused by a sharp tightening of global central bank monetary policy in response to strong inflation.
Bitcoin, the world’s most traded cryptocurrency, has fallen nearly 20 percent since Friday below $ 24,000, its lowest level since December 2020, according to CryptoCompare data. Meanwhile, the market value of the broader cryptocurrency market fell from a high of $ 3.2 million in November to about $ 1 trillion on Monday.
Binance, the world’s largest cryptocurrency exchange by volume, said it had temporarily suspended bitcoin withdrawals from its platform due to a “blocked transaction”. The company, which last month processed $ 1.2 trillion in cryptocurrency and derivative transactions, could not immediately provide further details on the matter.
Celsius is one of the largest players in the digital performance products market, and offers users the ability to lend their tokens as collateral for other cryptographic projects. In exchange for lending their tokens, traders were able to get annual returns of up to 17 percent.
Sentiment toward these high-risk projects cooled sharply after the land and moon tokens, which were the basis of another popular performance platform, collapsed within days. The value of assets deposited on the Celsius platform fell to less than $ 12 billion on May 17 from more than $ 24 billion in late December.
Ether, which is considered an indicator of the sentiment of digital asset projects that offer investors high returns, has fallen nearly 30 percent since Friday, leaving it at two-thirds in dollar terms this year to trade at $ 1,195. .
Monday’s sell-off also bounced back on shares of cryptocurrency-focused companies. MicroStrategy, a technology company that invests heavily in bitcoin, lost a quarter of its value in initial trading on Wall Street, while Coinbase, the Nasdaq-listed cryptocurrency exchange, fell 16 percent.
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Celsius raised $ 400 million last year in a round of capital funding led by Caisse de dépôt et placement du Québec, Canada’s second largest pension fund, and WestCap, the fund created by the Airbnb executive and Blackstone Laurence Tosi.
This fundraiser came even though U.S. regulators indicated they were examining the industry. Texas and New Jersey state authorities have alleged that Celsius performance accounts are equivalent to an unrecorded stock offering.
Celsius’ stoppage in early Monday retreats was also a turning point after several days were spent refuting allegations that customers could not make withdrawals. Chief Executive Alex Mashinsky challenged critics over the weekend to find “even someone who has trouble retiring.”
Celsius, which has offices in the United States, the United Kingdom and Lithuania, said the redemption freeze was done to “benefit our entire community to stabilize liquidity and operations as we take steps to preserve and protect our assets.” “.
The group’s own currency, known as the CEL ticker, has lost half its value in the last 24 hours, according to CryptoCompare data.
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