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Crypto firm Celsius pauses all transfers, withdrawals as markets tumble

Crypto firm Celsius pauses all transfers, withdrawals as markets tumble

The American-Israeli cryptocurrency lending firm said it was taking “this necessary action... in order to stabilize liquidity and operations while we take steps to preserve and protect assets"

Reuters | 09:32  13.06.2022

American-Israeli cryptocurrency lending firm Celsius Network will pause withdrawals and transfers between accounts due to "extreme market conditions", the company said on Monday, in the latest sign of pressure in the crypto industry.

Bitcoin extended earlier declines after Celsius's announcement, falling to an 18-month low.

"We are taking this necessary action ... in order to stabilize liquidity and operations while we take steps to preserve and protect assets," the company said in a blog post.

"Furthermore, customers will continue to accrue rewards during the pause in line with our commitment to our customers."

Celsius co-founders Alex Mashinsky (right) and Daniel Leon. Celsius co-founders Alex Mashinsky (right) and Daniel Leon. Celsius co-founders Alex Mashinsky (right) and Daniel Leon.

Celsius Network, which raised $750 million in funding late last year, is a significant player in crypto lending. It offers interest-bearing products to customers who deposit their cryptocurrencies with the company, and lends out crypto currencies to earn a return.

As of May 17, the company had processed $8.2 billion worth of loans and had $11.8 billion in assets, according to its website.

It said in August last year that it had more than $20 billion in assets.

While crypto lending has become increasingly big business, the sector has come under regulatory scrutiny, particularly in the U.S. read more

Crypto markets have been under pressure in recent months, falling alongside other so-called risk assets as interest rates have risen around the world.

Price falls have also both been caused by and contributed to the collapse of some crypto projects. Most notable was the fall of stablecoin TerraUSD, which last month broke its dollar peg and collapsed in value, rocking the crypto industry.

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Celsius was co-founded in 2017 by Israeli Daniel Leon, President and COO of Celsius, CEO Alex Mashinsky, and CTO Nuke Goldstein.

The company’s funding round last year included a Quebec teacher’s fund and WestCap, an investment fund. Aside from the cash, the round was meant to serve as a stamp of approval of the company’s legitimacy.

“That was exactly the point of our round - to kill all doubt,” Leon told Calcalist at the time. “Now, we have investors who have a lot more to lose than myself, and they’re putting their reputation on Celsius.”

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