Cryptocurrency lending firm, Celsius Network, announced on Monday June 13, that it is pausing all withdrawals, transfers, and swaps between accounts due to “extreme market conditions,” in the latest sign of pressure in the crypto industry.
The company disclosed that it took such a decision to meet its withdrawal duties over time while struggling to stabilize liquidity and protect assets.
The firm announced that the crypto market fell almost 12% as of 1123GMT in a significant selloff, as the total value of the crypto market dropped below $1 trillion for the first time in 17 months.
“We are taking this necessary action to stabilize liquidity and operations while we take steps to preserve and protect assets,” the company stated in a blog post.”
“But we believe that our decision to pause withdrawals, swap, and transfers between accounts is the most responsible action we can take to protect our community. We are working with a singular focus: to protect and preserve assets to meet our obligations to customers,” Celsius added in a blog post.
Celsius Network offers interest-bearing loans to users who deposit their cryptocurrencies and lend them out to earn a return.
Celsius’s Fall
“Our ultimate objective is stabilizing liquidity and restoring withdrawals, Swap, and transfers between accounts as quickly as possible. There is a lot of work ahead as we consider various options, this process will take time, and there may be delays,” Celsius Network affirmed.
In previous months, the general cryptocurrency markets experienced price rise and drop issues, dropping alongside other risk assets as interest rates surged.
Also, Celsius Network made it clear that actions in the interest of their community are their top priority.
“In service of that commitment and to adhere to our risk management framework, we have activated a clause in our Terms of Use that will allow this process to take place. Celsius has valuable assets, and we are working diligently to meet our obligations,” the statement said.
The company’s token, CEL, fell massively by 51% in value, dropping to $0.195 at the press time, while it was trading at nearly $1 a month ago.
Following Celsius’s news, the cryptocurrency market got spooked further, with the US inflation rate reaching a 40-year. Bitcoin (BTC) dropped more than 6% to a new low of $23,477, an 18-month low. Also, Ethereum (ETH) dropped more than 8% to $1,215, marking its lowest level since March 2021.
The global crypto market capitalization crashed by 6.63% to $1.04 trillion at press time. However, the global crypto volume due to increased liquidations rose by 28.47% to $94.06 billion, according to Coinmarketcap data.
