Cryptocurrency lending firm Celsius Network announced today that it will be pausing withdrawals and transfers between accounts in response to “extreme market conditions.”
The continued difficulties the market has faced in recent weeks have pushed cryptocurrency companies to act in various ways, with major platforms like Binance and Coinbase turning to investment during this turbulent period.
But, this kind of move seems fairly extreme and has had an effect on the price of Celsius Coin (CEL), with the coin dropping around 53% in the last 24 hours, with the price hovering around $0.19 at the point of publishing.
Unsettled Markets Forcing Tough Decisions
Bitcoin is currently trading at just over $24,000, down 12% since yesterday. It’s clear the markets are unstable, which has caused Celsius to take drastic action. They announced in a blog post today that "We are taking this necessary action ... in order to stabilize liquidity and operations while we take steps to preserve and protect assets," as well as stating "Furthermore, customers will continue to accrue rewards during the pause in line with our commitment to our customers."
Celsius Network, alongside companies like Nexo and BlockFi, offer a unique crypto lending and trading platform, with a focus on earning. Celsius has gained a lot of attention in the industry, offering unrivalled APY rates.
The company raised some $750 million in funding at the end of 2021. The company boasts of processing $8.2 billion worth of loans and had $11.8 billion in assets as of May 17th, with some $20 million in assets last August.
Despite the company’s success, it remains one of the companies that has come under regulatory scrutiny and is in the process of fighting a case brought by U.S. financial regulatory bodies.
Moreover, blocking client withdrawals will cause even further problems for the company. Turbulent crypto markets are nothing new and making this decision now will frustrate customers and may cause some to file complaints against Celsius.
Given what we saw with LunaTerra last month, now is the time to grow the industry and build meaningful relationships with customers. Ensuring this will be integral to the growth of the Celsius platform, especially during this period when trust between crypto firms and the public isn’t as strong as it should be.