Celsius Network, one of the biggest crypto lenders, told customers Sunday evening that it is pausing “withdrawals, swap, and transfers between accounts” in a move that is sparking discussions and has prompted the price of the firm’s token to take a 60% tumble in the past one hour to 19 cents.
“We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations,” wrote Celsius, which counts stablecoin-issuer Tether International and Canadian pension fund Caisse de Dépôt et Placement du Québec among its investors.
Celsius, valued at about $3 billion, allows users to deposit their Bitcoin, Ethereum and Tether and receive weekly interest payments. Depending on the time horizon and the token, the platform offers as much as 18% interest a year. On its website, Celsius says 1.7 million people call “Celsius their home for crypto.”
The announcement follows one of the brutal weekends in the cryptocurrency market that saw hundreds of millions of dollars worth of liquidation. At the time of publication, Bitcoin was trading at about $25,585 and Ethereum at $1,346, some of their lowest levels in over a year. Other high-profile crypto projects including Solana, BNB and FTT were also down.
Crypto lenders are facing increased scrutiny following the collapse of Terraform Labs’ Luna and its sister token UST. Alex Mashinsky, chief executive of Celsius Network, has sought to reassure customers in recent weeks. But on its website, Celsius says it has about $3.8 billion of assets, down from $24 billion it disclosed in late December 2021.