DeFi lending giant Celsius halts withdrawals

All withdrawals, swaps, and transfers between accounts will now be handled by the Celsius Network. There are 1.7 million people who use it.

The company's token is currently trading at 23 cents. It was worth $3 on April 8th. A year ago, it was worth $7.

There have been questions about Celsius Networks and its connections. The value of assets on the platform decreased by half in May. A billion dollars left the system between March and May.

In a June 7th post entitled " Damn the torpedoes", the company said that they have the reserves to meet obligations.

It was then. An email was sent to all customers on June 12th.

Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts. We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.

In theory, Celsius works the same as an ordinary bank. Deposits are collected and then loans out. An 18.63 annual percentage yield was advertised on the site. Celsius doesn't have government insurance that protects people in the event of a bank failure.

Celsius Network is going to fail according to skeptics. Celsius is a Ponzi scheme according to some people.

Celsius affects a lot of other markets. Celsius Network borrowed money from a stable coin. The loan was originally $1billion. The loan is backed by a virtual currency. Alex Mashinsky, the CEO of Celsius, told The Financial Times last year that if the price of Bitcoins dropped, they would need to give them more of the virtual currency.

Celsius has a lot of exposure to investors who aren't involved incryptocurrencies. Canada's second-largest pension fund invested in a $400 million equity round for the company.

The regulators are interested in Celsius Network's operations. On September 17th, New Jersey issued a cease-and-desist order to Celsius Network, Texas scheduled a hearing to determine if it should issue a cease-and-desist, and Alabama inquired of Celsius why it shouldn't be banned. The company was included in the New York Attorney General's request to provide information on its activities and products in October of 2021.

There's more to come. The CFO of Celsius was arrested in Israel on suspicion of money-laundering, fraud, and sexual assault. After the arrest, he was suspended from his job at Celsius. The Celsius network lost over 50 million dollars when the Defi platform was hacked. The client and user assets were not affected.

In its note to its customers, Celsius stated that it was its ultimate objective. This process will take time, and there may be delays, and it did not give a date for when customers would be able to withdraw again.