Technology

The crypto market is on fire, the famous cryptocurrency lending platform stops trading


Celsius, a cryptocurrency lending platform, has suspended all withdrawals and transfers due to “extreme market conditions.”

Celsius is one of the biggest players in the fledgling cryptocurrency lending space. As of May, the company has lent customers more than $8 billion and manages nearly $12 billion worth of crypto assets. This exchange also has a higher deposit interest rate compared to other companies.

In a statement issued on June 13, Celsius said that “due to extreme market conditions, the company will suspend all withdrawals, swaps and transfers between accounts.”

The move has raised concerns about Celsius’ solvency. Compared to the time of October last year, this company has seen the number of assets in the customer fund evaporate more than 50%.

Celsius’s token also lost 97% of its value during this period.

“Acting for the benefit of the community is our highest priority,” Celsius said in a statement. “In order to meet its commitments and comply with the risk management framework, the company has activated a text in the Terms of Use that allows this process to take place. Celsius has valuable assets and the company is working hard to meet its obligations.”

According to Coin Metrics data, the world’s largest cryptocurrency Bitcoin has dropped more than 8% in value, to less than $24,000, while Ether has also experienced a similar drop, to just $1,300.

Market participants think Celsius has something to do with terraUSD, the stablecoin that has just collapsed recently. However, the exchange denied this information.

Last week, Celsius still insisted there were no problems with making withdrawal payments. The company said it has stockpiled more than the standard amount of Ether to meet related obligations.

The crypto lending sector is still in the legal gray zone. Market regulators in the US believe that many financial products related to this sector should be treated as securities to protect investors.

In February, BlockFi, a Celsius rival, was fined $100 million by the US Securities and Exchange Commission for violating securities laws.

Vijay Ayyar, international director at crypto exchange Luno, said that Celsius halting withdrawals made the sell-off in the crypto market even more severe.

Vinh Ngo (According to CNBC)

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