Bitcoin plunges as crypto company Celsius Network freezes customer withdrawals, transfers

Bitcoin plunges as crypto company Celsius Network freezes customer withdrawals, transfers

Celsius Network, which touted itself as the “world’s leading crypto earning and lending platform,” is freezing all withdrawals and transfers between its 1.7 million customers, as digital assets and tokens have sunk to their lowest levels in years.

In a blog post late Sunday, citing “extreme market conditions,” the New Jersey-based company said a clause about risk management framework in its terms-of-use agreement has been activated while it works to meet its withdrawal obligations. “There is a lot of work ahead as we consider various options, this process will take time, and there may be delays,” the company said.

“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,” Celsius said. “Our ultimate objective is stabilizing liquidity and restoring withdrawals, Swap, and transfers between accounts as quickly as possible.”

Just last year, Canadian pension fund giant Caisse de dépôt et placement du Québec pitched in for a US$400-million investment into Celsius. “Celsius is the world’s leading crypto lender with a strong management team that puts transparency and customer protection at the core of their operations,” said Alexandre Synnett, executive vice-president and chief technology officer at the Caisse, in a press release for the investment made in October, 2021.

The Caisse’s investment, in partnership with equity firm WestCap, placed a total value of US$3-billion for Celsius, which was founded in 2017. Other investors for Celsius include Tether International, an issuer for tether, the most prominent stablecoin cryptocurrency pegged to and backed by the U.S. dollar.

In a tweet on Monday, rival lending platform Nexo offered to buy qualifying assets from Celsius, calling it an “insolvency” that is causing repercussions for retail investors in the crypto community. Nexo attached a letter of intent to its tweet, which mentioned its interest in the collateralized loan portfolio from Celsius, but did not provide a price for its offer.

Major cryptocurrencies tumbled on Monday following the Celsius announcement. Bitcoin touched an 18-month low of $30,349. Ether dropped as much as 16 per cent to $1,565, its lowest in two years.