Celsius Network, a cryptocurrency lending platform, has stopped withdrawals due to extreme market circumstances as the digital asset market value continues to fall. After the Celsius announcement, Bitcoin fell to $23,880, a 17-month low. Ether, the second-largest cryptocurrency in the world, plummeted more than 15% to $1,250, its lowest level since January 2021.
According to CoinMarketCap data, the total market value fell below $1 trillion Monday following the sell-off. It had been valued at nearly $3 trillion in November.
Celsius stated in a blog post that it had “purged” all withdrawals from and transfers between accounts of its 1.7 million customers. Customers can get high interest rates of up to 18% on cryptocurrency deposits. The company also pays interest in crypto assets.
Celsius published a blog on June 7 to try and reassure customers in volatile cryptocurrency markets. This was triggered by the collapse of Terra, the crypto project.
The blog headlined “Damn those torpedoes. Full speed ahead.” It stated that the company has not had any problems meeting withdrawal requests. Celsius has offices in London and New York, as well as Lithuania.
Celsius’s website states that customers can “borrow like billionaires.” It now has $11.8 billion of assets, down from $24 billion last December. It reported that it raised $750 million from investors, including Caisse de depot et placement du Quebec, one of Canada’s largest pension funds.
Sometimes, this strategy can lead to large losses. A hack on BadgerDAO, a decentralized investment platform, which wiped out the project, was revealed as having cost Celsius $50 million in Bitcoin.
The company also had a close relationship with Terra, a defunct stablecoin-based project. At one time, it invested $500 million in Anchor Protocol, Terra’s own saving and lending platform. Customers can also get higher returns by accepting interest payments in Celsius’s crypto token, CEL. This was $7 last year, but has fallen to $0.20.
