With crypto markets already in a nosedive, crypto lender Celsius abruptly halted all customer operations on Sunday night. This included withdrawals, swaps, and transfers.
“We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations,” the company wrote in a blog post on Medium. “We are taking this necessary action for the benefit of our entire community to stabilize liquidity and operations while we take steps to preserve and protect assets.”
.@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. More here: https://t.co/CvjORUICs2
— Celsius (@CelsiusNetwork) June 13, 2022
Celsius token quickly reacts
According to CoinMarketCap, the company’s CEL token dropped 70% in one hour. It came from a previous high of $0.49 earlier on Sunday to $0.15.
The rest of the crypto market was having a bad day when Celsius announced its news on Sunday, though nothing compared to CEL’s steep collapse.
At the time of writing, Bitcoin was down 9%, Ethereum was down 9%, BNB was down 9%, Cardano was down 11%, Solana was down 12%, and Dogecoin was down 9%.
Not without controversy
Celsius was founded in 2017 and provides consumers with a high interest in cryptocurrency deposits. Which it lends to other cryptocurrency firms. BlockFi and Nexo, among others, share Celsius’ business concept.
In the last year, many regulators have stated that these high-yield crypto loan schemes are unregistered securities offerings.
They canceled Coinbase’s own planned Lend program that month after the SEC threatened to sue if it went live.
Blockfi, on the other hand, settled with the SEC and 32 states in February this year. It settled for $100 million and agreed to register its investment products for SEC clearance properly.
Nexo and Celsius, its competitors, have yet to announce similar arrangements or plans.
BlockFi CEO Zac Prince responded to the Celsius news on Sunday, tweeting that all BlockFi services “continue to operate normally.”