Celsius Platform Suspends Cryptocurrency Withdrawals and Transfers

Celsius in turmoil?

In a tweet accompanied by a blog post, the lending platform Celsius announced pausing withdrawals, swaps and cryptocurrency transfers between accounts on its platform due to “ extreme market conditions » :

“We are taking this action today to put Celsius in a better position to meet its withdrawal obligations over time. »

The announcement follows a drop in cryptocurrency prices over the weekend and comments on Twitter that Celsius Network is facing a liquidity crunch.

Indeed, Celsius users have criticized the platform for how they believe she mismanaged her funds following the collapse of the Terra ecosystem and its stablecoin UST.

According to some, if Celsius were to fail, the platform would be forced to sell its large amount of stETHwhich could accelerate the depreciation that Ether is already experiencing.

As a reminder, stETH is a token issued by the Lido lending platform, which certifies that a user has indeed staked ETH within the framework of Ethereum 2.0.

A delinquent CEL token

Following the news, the price of CEL, the token of Celsius, immediately began to fall, collapsing by $0.365 to nearly $0.09that is a drop of more than 75% in just 20 minutes.

At the time of writing these lines, the price of the CEL token is around $0.20 and is trying somehow to go up the slope:

Evolution of the price of the CEL token since the announcement of Celsius

Celsius maintains in its press release that this difficult decision was made to protect its users and meet its obligations:

“We understand that this announcement is painful, but we believe that our decision to suspend withdrawals, swaps and transfers between accounts is the most responsible action we can take to protect our community. We work with one goal: to protect and preserve assets to meet our obligations to our customers. »

Whatever, the Celsius platform might not be an isolated case. It remains to be seen whether BlockFi or Nexo, to name a few, will make similar decisions in the coming days.

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Source: Celsius Blog Chart Source: TradingView

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About the Author : Clement Wardzala

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Editor-in-chief of Cryptoast, I discovered Bitcoin and blockchain technology in 2017. Since then, I have been striving to share quality content so that the sector becomes more democratic for everyone.
All articles by Clément Wardzala.

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