Celsius Crypto: Big Crypto Lender Celsius Freezes All Account Withdrawals
The crypto community is only now beginning to recover from the Terra catastrophe. In the middle of this, Celsius, a popular crypto staking and lending site, appeared to be on its way out.
The Celsius crypto network had a particularly hectic weekend. The platform was chastised for its poor financial management. In May, the crypto-staking network allegedly had 1.7 million users and $12 billion in customer holdings. To counteract this, Celsius published a blog post announcing the suspension of withdrawals, swaps, and transfers.
The platform said that "extreme market conditions" prompted them to do so in a lengthy blog post.
BREAKING: Celsius Network has paused all withdrawals, swaps, and transfers between accounts due to "extreme market conditions."
— Watcher.Guru (@WatcherGuru) June 13, 2022
Celsius emphasized throughout the blog post that the community's best interests were its main focus. The statement went on to say, "Further describing the underlying work that the platform was engaged in,
"We are working with a single goal in mind: to safeguard and maintain assets so that we can satisfy our consumer responsibilities." Our ultimate goal is to restore liquidity as rapidly as possible, including withdrawals, swaps, and transfers between accounts. As we explore numerous choices, there will be a lot of work ahead of us; this process will take time, and there may be delays."
While the crypto market was already in the red, this news pushed CEL, Celsius's native token, down by 40.9 percent in the previous few hours. The cryptocurrency was trading for a low price at the time of publication.
Celsius's action has angered the community.
Terra's demise created terror across the neighborhood. As a result, when Celsius faced a liquidity difficulty, a slew of them stepped in to link it to Terra's downfall. The community was obviously outraged by the network's decision to put a halt to withdrawals, swaps, and transfers.
There must be many users who are in a position of leverage and desperately need those funds from Celsius, now locked away. I’m sad we’ve gotten here. Protect yourselves.
— Ledger 🇺🇸 Prometheus of the Plebs (@ledgerstatus) June 13, 2022
Meanwhile, it was revealed that the network delivered over 50,000 ETH to the San Bankman Fried crypto exchange, FTX, valued at $66.97 million. This transaction was completed barely three hours before Celsius suspended withdrawals. In addition, around 3,500 WBTC worth $89 million were moved to FTX less than an hour before the suspension.
#PeckShieldAlert Celsius transferred ～3,500 $WBTC (~$89m) to FTX within the last hour. https://t.co/nKCorHfuex pic.twitter.com/juiz6NmOpN
— PeckShieldAlert (@PeckShieldAlert) June 13, 2022
It's also worth noting that two days earlier, Celsius's CEO, Alex Mashinsky, took to Twitter and stated,
Celsius CEO questioned if anyone "has a problem withdrawing from Celsius" before pausing trading and withdrawals two days later due to "extreme market conditions." pic.twitter.com/qaUuAD5b7Q
— Watcher.Guru (@WatcherGuru) June 13, 2022
While some predict the demise of Celsius, others continue to see parallels between it and Terra.