Celsius stops transactions due to extreme market

Celsius suspends all withdrawals. The lending platform says it is responding to the extreme conditions in the market. Earlier this year, Celsius also stopped their interest products for Americans.

With Celsius, you can earn money with your bitcoin in all sorts of ways. At least that is the promise. With various interest products, you receive rewards in the form of interest paid in crypto currencies.

Currently, customers cannot withdraw money, and reportedly cannot deposit money either. Of course, this causes a lot of problems in practice.

The price of BTC is falling towards $25,000, and that means action on the market. However, savers, investors, borrowers and other customers of Celsius cannot now access their money. In fact, some cannot even close an open position due to the new measures.

According to the bank, users still receive their interest and rewards ‘as usual’.

.@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

Explanation

In a blog post, the company provides an explanation.

Celsius has suspended withdrawals, swaps and transactions between different accounts. The company hopes that this action will provide more financial security for the future.

How this will work out in practice, however, remains to be seen. The explanation also mentions the terms of use. Apparently, there is something hidden in them that allows Celsius to act in this way: “We have activated a clause in our terms of use that allows us to do this. Celsius has valuable assets and we are working hard to meet our obligations.”

What exactly is going on is still unclear. It seems very likely that Celsius has been hit hard by the current market.

Speculation

Meanwhile, speculation is growing on social media. Is this a Luna 2.0? The twitterer below has listed the various scenarios. In the most favourable scenario, Celsius buys time to meet its financial obligations.

The influential crypto tweeter judges that Celsius is in serious trouble, as are its users.

That users are in deep trouble is demonstrated by the tweet below. It is a choice between two evils: getting liquidated by the falling crypto market or being dependent on a party (Celsius) that has frozen your assets.

The coming days and weeks will be uncertain for Celsius and its users. Also because one received rewards in the native token Celsius (CEL).

Celsius is not the least important party on the crypto market. Among others, a Canadian pension fund is a shareholder in the company. They have also reportedly invested half a billion dollars in bitcoin mining.

At the end of 2021, the financial director of the company was arrested in Israel.

Not your keys, not your bitcoin

As Bitcoin Focus editor Marnix wrote in his blog post this Friday:

‘Not Your Keys, Not Your Coins is an important statement among bitcoiners. It has gone wrong plenty of times: someone else (like a trading platform) manages your bitcoin keys, something goes wrong on the trading platform, and your bitcoin is gone. Real bitcoiners prefer to store bitcoin themselves: personal responsibility’.