Celsius Network, one of the largest crypto lenders, told customers Sunday night that it was pausing withdrawals, swaps and transfers between accounts in progress, sparking discussions and causing the company’s token price to fall 60% in the past. time up to 19 cents.
“We are taking this action today to put Celsius in a better position to meet its towing obligations over time,” wrote Celsius, which counts the issuer of stable coins Tether International, the equity fund WestCap Group and the Canadian Pension Fund. Caisse de Dépôt et Placement du Québec among its investors.
“Action in the interest of our community is our top priority. In the service of this commitment and in order to adhere to our risk management framework, we have activated a clause in our Terms of Use that will allow this process to take place. Celsius has valuable assets and we are working hard to meet our obligations. ”
Celsius, valued at $ 3.25 billion when it expanded its Series B funding for “rewriting” to $ 750 million in November, allows users to deposit their Bitcoin, Ethereum and Tether and receive weekly interest payments. Depending on the time horizon and the token, the platform offers up to 18% interest per year. Celsius says on its website that 1.7 million people call “Celsius their home for cryptocurrency.”
The announcement follows one of the brutal weekends in the cryptocurrency market, which was liquidated worth hundreds of millions of dollars. At the time of publication, bitcoin was trading at about $ 25,585 and Ethereum at $ 1,346, one of the lowest levels in more than a year. Other high-profile crypto projects, including Solana, BNB and FTT, also fell.
There must be many users who are in a leverage position and desperately need those Celsius funds that are now locked up. I’m sorry we got here. Protect yourself.
– General Ledger 🇺🇸 Prometheus of the Plebs (@ledgerstatus) 13 June 2022
Crypto creditors are facing heightened controls following the collapse of Luna at Terraform Labs and its sister token UST last month. Alex Maszynski, CEO of Celsius Network, has been trying to reassure customers in recent weeks that he could withdraw his assets at any time and questioned skeptics. The company has also launched a recurring promotion recently, offering customers rewards if they transfer assets to Celsius accounts and help items 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 about $ 3.8 billion in assets, which is less than the $ 24 billion it revealed in late December 2021.
“The beauty of what Celsius has managed to do is deliver profitability, pay it to people who will never be able to do it themselves, take it from the rich and surpass the index. It’s like going to the Olympics and winning 15 medals in 15 different fields, “Maszynski said in a video broadcast in December.
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