Celsius halts user withdrawals due to ‘extreme market conditions’

Sahana Kiran
Source – Unsplash

The crypto community has just started recovering from the Terra crash. Amidst this, the crypto-verse seemed to be witnessing the downfall of Celsius, a prominent crypto staking and lending platform.

It was clearly a chaotic weekend for the Celsius network. The platform was condemned for its poor management of funds. The crypto staking network with 1.7 million users reportedly entailed $12 billion in customer assets in May. With this at bay, Celsius formulated a blog post announcing the hold on withdrawals, swaps, and transfers.

In the elaborate blog post, the platform suggested that “extreme market conditions” forced it to do so.

Throughout the blog post, Celsius implied that the community’s interest was its top priority. Further detailing the background work that the platform was engaging in, the post read,

“We are working with a singular focus: to protect and preserve assets to meet our obligations to customers. Our ultimate objective is stabilizing liquidity and restoring withdrawals, Swap, and transfers between accounts as quickly as possible. There is a lot of work ahead as we consider various options, this process will take time, and there may be delays.”

While the crypto market was already painted in red, this news further pushed CEL, the native token of Celsius down by 40.9 percent over the last couple of hours. During press time, the token was trading for a low of $0.226208.

Community not so pleased with Celsius’s decision

The downfall of Terra instilled fear in the entire community. Therefore, as Celsius dealt with a liquidity crisis, an array of them jumped in quickly to compare it to the demise of Terra. The community was visibly enraged with the network’s decision to press pause on withdrawals, and swaps as well as transfers.

Meanwhile, it was brought to light that the network sent over 50,000 ETH worth about $66.97 million to San Bankman Fried crypto exchange, FTX. This transaction was made just three hours before Celsius decided to suspend withdrawals. In addition to this, less than an hour before the suspension, about 3,500 WBTC worth $89 million was transferred to FTX.

Additionally, it should also be noted that two days ago, the CEO of Celsius Alex Mashinsky, took to Twitter and said,

While some foresee the end of Celsius, a few others continue drawing comparisons between this network and Terra.