Leading CeFi platform Celsius Network halts its withdrawals, swaps, and transfers citing extreme market conditions
The native token of Celsius Network has crashed 50% and is currently sitting at $0.1855
Celsius Network, one of the leading crypto lenders of the DeFi sector, has decided to halt withdrawals, swaps, and transfers between accounts citing the current market volatility. The move ended up directly impacting the prices of Celsius’s network native token $CEL which plummeted 50% to a new low of $0.1855, according to crypto tracker website CoinMarketCap.
Celsius’s Native Token Falls 50% to $0.1855
Celsius’s dramatic price drop accompanies the ongoing crypto market sentiment that has affected the prices of several leading cryptocurrencies. While Bitcoin has dropped below its $26,000 mark, the second-largest crypto by market cap, Ethereum has also crashed to a new low of $1,284 at press time.
Celsius Halts Withdrawals, Swaps, And Transfers
In an updated blog post issued on June 12, Celsius announced its decision to halt withdrawals, swaps, and transfers on its network citing the extreme market volatility prevalent in the current crypto sector.
“Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swaps, and transfers between accounts. We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.”
The network further stated that its decision to halt transactions on its network is in alignment with what’s best for the Celsius community.
“We are taking this necessary action for the benefit of our entire community 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.”
The blog further stated that the network is currently in the process of “protecting and preserving its assets” with the objective of “stabilizing liquidity and restoring withdrawals.” However, the blog post cautioned users to expect delays as it may take a while for the network to get back on track.
“Our ultimate objective is stabilizing liquidity and restoring withdrawals, Swap, and transfers between accounts as quickly as possible. There is a lot of work ahead as we consider various options, this process will take time, and there may be delays.”
Founded in 2018 by American entrepreneur Alex Mahinsky, Celsius Network is a decentralized banking platform with a focus on crypto lending and borrowing. The platform connects several crypto lenders with borrowers, enabling them to earn yields on deposits and take cash loans on crypto holdings.
The network’s ecosystem is largely governed by its native token CEL, which is used by investors across the domain to take loans, provide rewards and make payments. The crashing of CEL has prompted the network to enter into a crisis mode, leading to the suspension of transactions temporarily to avoid further crypto turmoil.
In addition to this, the network has constantly attracted criticism and suspicions concerning its scheme of regular payouts and high-interest rates, with various crypto users addressing its scheme as “Ponzi.” Several crypto critics have also remarked that the network uses funds from other sources rather than its own investments to support the regular customer payouts.