Due to extreme market conditions, Celcius, a crypto staking and lending platform, has halted all swaps, transfers, and withdrawals.
Celsius, a cryptocurrency lending firm, allows users to stake cryptocurrency, which can then be used as collateral for loans. Celsius users may be nervous right now because the platform paused withdrawals in order to “put Celsius in a better position to honor, over time, its withdrawal obligations,” according to a Monday announcement from the project. Celsius CEO Alex Mashinsky deflected blame for the platform’s problems, including rumors of insolvency, to shadowy Wall Street opportunists, Cointelegraph reported in May.
What Happened to Celcius
Celsius, a cryptocurrency lending platform, announced on Sunday that it would pause withdrawals on its platform, citing market conditions as the price of Ether and other cryptocurrencies plummeted.
The firm took to Twitter to announce the suspension of withdrawals, transfers, and swaps, noting:
“@CelsiusNetwork is pausing all withdrawals, Swap, and transfers between accounts. Acting in the interest of our community is our top priority. Our operations continue and we will continue to share information with the community.”
On the news, the price of Celsius’s native token fell sharply, falling 45 percent to $0.21 per coin.
How Celcius Users Reacted to News
Celsius has transferred more than a quarter-billion dollars from Aave to the FTX exchange for unknown reasons, while also suspending withdrawals for users.
Celsius may be dealing with its rumored liquidity crisis by withdrawing $247 million in Wrapped Bitcoin (wBTC) from Aave and transferring it to the FTX exchange.
Speculations are now rife in the crypto community, as the project has been moving massive amounts of wBTC, Ether (ETH), and other crypto assets, as well as pausing withdrawals for users.
Following the collapse of the Anchor Protocol on the now-named Terra Classic blockchain, Celsius users have criticized the platform for how they believe the project mismanaged its funds. The project could address those issues.
Are Crypto Exchanges Reliable Anymore?
Many social media users appear to be waiting for other cryptocurrency exchanges, such as Coinbase and Kraken, to follow Binance and Celsius’ lead and suspend withdrawals.
Binance, a major cryptocurrency exchange, announced on Monday that it had temporarily halted BTC withdrawals. Binance announced that it had resumed Bitcoin withdrawals after a three-hour hiatus due to market volatility.
However, many people on social media appear to be waiting for the other shoe to drop, as it were, with regard to other major cryptocurrency exchanges. Given Coinbase’s history of outages, some have expressed concern that the exchange, which has approximately 98 million verified users, could go offline during market volatility or otherwise announce the suspension of withdrawals. Kraken, a cryptocurrency exchange based in the United States, has not announced any similar withdrawal restrictions.
Why Choosing A Platform With A Good Reputation Is Important
Pessimism has gripped the cryptocurrency community on what has been dubbed “Black Monday” for cryptocurrencies. Investors had to deal with not only the cryptocurrency crash, but also the uncertainty of whether their normally trusted platforms would survive the market, whether their assets were safe, and so on. This undoubtedly shakes people’s faith in their investments, exacerbating the turmoil in the virtual industry and causing more losses for investors.
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