Celsius Network cryptocurrency lending platform suspended withdrawals due to “extreme market conditions”, causing a sell-off. Bitcoin fell to a 17-month low of $ 23,629 after the announcement of the degrees Celsius, while ether, the second largest cryptocurrency in the world after bitcoin, fell more than 15% to $ 1,237, the lowest since January 2021. Meanwhile, Binance, the cryptocurrency exchange, announced that it had “temporarily suspended” bitcoin withdrawals due to a “stuck transaction in the chain”, before announcing the resumption several hours later. The total value of the cryptocurrency market fell below $ 1 trillion after the sell-off, according to data site CoinMarketCap, which valued the market at nearly $ 3 trillion in November. Celsius said in a blogpost that it was “shutting down” all withdrawals and transfers between accounts for its 1.7 million customers. The company offers customers high interest rates – up to 18% – on their cryptocurrency deposits and pays interest on encrypted assets, which include its own badge, called CEL. “Due to the extreme market conditions, today we announce that Celsius is suspending all withdrawals, exchanges and transfers between accounts,” the platform said. “We are taking this action today to put Celsius in a better position to honor, over time, his withdrawal commitments.” Binance said in a statement that bitcoin withdrawals had been suspended shortly after noon in the UK “due to a previous batch trading due to low transaction fees submitted”. As a result, there has been an accumulation of withdrawals from the bitcoin network, Binance said. He then announced at 4.30 p.m. BST that the withdrawals had been repeated. On June 7, Celsius published a blog seeking to reassure customers amid volatile cryptocurrency markets, initially caused by a collapse of the Terra encryption project. Under the headline “Available torpedoes, fast forward”, the blog reported that the company had “no problem meeting the withdrawal requests”. Celsius has offices in London, New York and Lithuania. The Celsius website tells customers that they can “borrow like billionaires”. It has assets of $ 11.8 billion, down from $ 24 billion in December last year. In November, he said he had raised $ 750 million from investors, including the Caisse de dépôt et placement du Québec, one of Canada’s largest pension funds. Like a bank, Celsius also has a retail lending function, with customers who can borrow money, in US dollars, from the service. Due to the inability to send debt collectors after a cryptocurrency wallet, however, Celsius loans are “over-secured”: customers must deposit bitcoin or ethereum worth at least twice the value of the money borrowed. This can be useful if, for example, a bitcoin millionaire needs some hard cash to buy a home but does not want to liquidate his bitcoin deposits because they are playing the currency going up again. However, unlike a bank, Celsius loans charge a lower interest rate than what it pays on deposits. The company is making a difference through an opaque investment strategy that previously involved investing $ 300 million in bitcoin mining, offering more traditional loans to anonymous “institutional investors” with higher interest rates and large stakes in other cryptocurrency projects. Subscribe to the daily Business Today email or follow the Guardian Business on Twitter at @BusinessDesk Occasionally, this strategy has led to huge losses: a hack of the decentralized investment platform BadgerDAO that wiped out this project was revealed to have cost $ 50 million Celsius in bitcoin. The company was also closely associated with the abandoned stablecoin Terra project, at one point investing $ 500 million in Anchor Protocol, Terra’s savings and lending service. Celsius also offers customers higher returns if they accept their interest payments with the project’s cryptocurrency, CEL, which traded at $ 7 last year and has fallen to less than $ 0.20. Cryptocurrencies have also been driven by market panic due to rising inflation and higher interest rates, which has reduced the appetite for higher-risk assets. “As inflation proves to be an even tougher opponent than expected, bitcoin and ether continue to show serious bruises in the ring,” said Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown. “They are the main victims of fleeing away from risky assets, as investors worry about the spiraling rise in consumer prices around the world.”
