Celsius Network, one of the largest cryptocurrency providers, told customers on Sunday evening that it is pausing withdrawals, exchanges and transfers between accounts in a move that has sparked discussions and caused the price of the company fell 60% in the past. an hour up to 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 has stable currency issuer Tether International, the WestCap growth capital fund. Group and the Canadian Pension Fund Caisse de Dépôt et Placement. du Québec among its investors.
“Acting in the interest of our community is our highest priority. In service of this commitment and to adhere to our risk management framework, we have activated a clause in our Terms of Use that will allow us to carry out this Celsius has valuable assets and we are working diligently to meet our obligations. “
Celsius, 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 payments from weekly interest. Depending on the time horizon and the token, the platform offers up to 18% interest per year. On its website, Celsius says 1.7 million people call “Celsius their home for crypto.”
The announcement follows one of the brutal weekends in the cryptocurrency market that saw the liquidation of hundreds of millions of dollars. At the time of publication, Bitcoin was trading at about $ 25,585 and Ethereum at $ 1,346, some of its lowest levels in more than a year. Other high-profile cryptographic projects such as Solana, BNB and FTT also fell.
There must be many users who are in a leverage position and desperately need these Celsius funds, now closed. I’m sorry we got this far. Protect yourself.
– Ledger 🇺🇸 Prometheus of the Plebs (@ledgerstatus) June 13, 2022
Cryptographic lenders face greater scrutiny following the collapse of Terraform Labs’ Luna and its sister witness UST last month. Alex Mashinsky, CEO of Celsius Network, has been trying to reassure customers over the past few weeks, saying they can withdraw their assets at any time, and questioned skeptics. The company also recently launched a recurring promotion, offering customers rewards if they transfer assets to Celsius accounts and support positions for up to 180 days.
But Celsius has also faced high sales in recent months. The lender says on its website that it has about $ 3.8 billion in assets, below the $ 24 billion it revealed in late December 2021.
“The beauty of what Celsius achieved is that we give performance, we pay people who could never 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 released in December.