Celsius locks customer withdrawals and transfers over 100,000 ether and 9,000 wBTC to FTX exchange

Charlie Taylor

On Sunday night, with cryptocurrency markets already in freefall, controversial crypto lending company Celsius announced that it was suddenly pausing all customer withdrawals, exchanges and transfers. Journalist Colin Wu identified from blockchain analysis that Celsius has made massive transfers of its funds in the last three days. There were 104,000 ethers (about US$129 million) and 9,500 wrapped bitcoins (about US$228 million).

Comparisons with Terra LUNA and Bitconnect

“We are taking this action today to put Celsius in a better position to honor, over time, its retirement obligations,” the company wrote in a Medium blog post. “The action needed for the benefit of our entire community to stabilize liquidity and operations while taking steps to preserve and protect assets. In addition, customers will continue to accumulate rewards during the break in line with our commitment to our customers.”

The company’s CEL token reacted quickly, dropping 70% in an hour from a previous high of $0.49 on Sunday to $0.15, according to CoinMarketCap. Cryptocurrency investors on Twitter drew comparisons to the recent Terra collapse, as well as the infamous Bitconnect cryptocurrency Ponzi scheme. The rest of the cryptocurrency market was also not having a good day on Sunday when Celsius shared its news, although nothing compared to the dramatic drop in CEL. Bitcoin is down 9% on Sunday at the time of writing, Ethereum is down 9%, BNB is down 9%, Cardano is down 11%, Solana is down 12% and Dogecoin is down 9%.

Income trades on deposits

Celsius was launched in 2017 and offers customers high yield for cryptocurrency deposits, which it lends to other cryptocurrency companies. It shares this business model with BlockFi and Nexo, among other players. In the past year, many regulators have made it clear that they view these high-yield cryptocurrency lending products as unregistered bond offerings; Last September, four states (New Jersey, Texas, Alabama, and Kentucky) submitted cease and desist letters to Celsius. That month, Coinbase closed its own planned Lend product after the SEC threatened to sue if it launched. investment for SEC approval. Celsius and Nexo have yet to announce similar agreements or plans. In response to the Celsius news (and the inevitable comparisons), BlockFi CEO Zac Prince tweeted late Sunday that all BlockFi services “continue to operate as normal.”

Alex Mashinsky, CEO of Celsius, remains silent on Twitter, having only shared the company’s blog post. *Translated with permission from Decrypt.co.

Click to rate this post!
[Total: 0 Average: 0]
Next Post

Historic victory for the Swedish shooting star - gets 3.5 million

Faster and safer future with 5G Published: 17 May 2022, 10:29 Updated: 20 May 2022, 09:42Faster, safer and more efficient. The fifth generation mobile network, 5G, can not only offer companies tailor-made and faster solutions than today. It can also increase safety and production.Read more: Six experts answer questions about […]
Historic victory for the Swedish shooting star - gets 3.5 million

Subscribe US Now