The Celsius Network halts withdrawals as CEL drops by 50 percent in 24 hours
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Celsius Network disabled withdrawals, swaps, and transfers from its platform, which led to its native token CEL losing up to half of its value. Celsius is one of the largest DeFi lending companies in the world that offers interest savings accounts, borrowing, and payments with digital and fiat assets. It manages almost 12 billion euros in customer assets
In an official letter to Celsius clients, the platform assured them that the company was facing “extreme market conditions.” This refers to the sharp falls in the cryptocurrency market over the last month.
Last Friday, the U.S. revealed the country’s highest inflation rate in 40 years, which led to cryptocurrency prices tumbling. Today, Celsius’ decision to suspend withdrawals resulted in an even more severe market plunge.
Bitcoin has fallen 13% in the last 24 hours and now stands at $23,800, the lowest point since December 2020. Ethereum, the network on which Celsius is built, is currently trading at $1,224. ETH experienced a 24-hour drop of 16% and a 35% decline in the last seven days. The total crypto market cap has fallen below $1 trillion for the first time since January 2021.
Celsius (CEL) was down 60% on Monday and now trades at $0.31. In one year, the token has dropped about 97%, from around $8 to 20 cents.
According to the official memo by Celsius, the company is acting in the best interest of the community and plans to restore withdrawals soon:
“We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets. Furthermore, customers will continue to accrue rewards during the pause in line with our commitment to our customers.”
It didn’t take much time for Twitter’s cryptocurrency community to begin labeling Celsius as the next Luna. Many users commented that Celsius started blocking crypto withdrawals already a week ago. Moreover, two days ago, the CEO of Celsius, Alex Mashinsky, responded to one user that he was spreading misinformation and implied no one was having problems withdrawing from Celsius.
Mashinksy also backed out of the AMA event (Ask Mashinsky Anything) prior to halting withdrawals because he “lost his voice.”
It’s also concerning that Celsius transferred $320,000,000 worth of cryptocurrency to FTX a few days before the announcement.
Following the platform’s status, Nexo, a London-based competitor of Celsius, has announced on Twitter that it’s ready to buy any “remaining qualifying assets” of Celsius, “primarily its collateralized loan portfolio.” As the tweet said, the company is putting together an offer and will soon make it public. In October 2021, Celsius had a valuation of over $3 billion.
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