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Celsius collapse: Crypto plunges after withdrawals suspended

·2-min read
Celsius Network’s cryptocurrency plunged more than 60 per cent in price on Monday, 13 June, after the platform paused withdrawals (Getty Images/iStockphoto)
Celsius Network’s cryptocurrency plunged more than 60 per cent in price on Monday, 13 June, after the platform paused withdrawals (Getty Images/iStockphoto)

The Celsius cryptocurrency has lost nearly 80 per cent of its value amid a major collapse that has wiped more than $400 billion from the crypto market.

The CEL token is affiliated with the lending platform Celsius Network, which suspended customer withdrawals on Sunday evening citing “extreme market conditions”.

“Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts. We are taking this action today to put Celsius in a better position to honour, over time, its withdrawal obligations,” the company wrote in a blog post on Monday.

“We are taking this necessary action for the benefit of our entire community in order to stabilise liquidity and operations while we take steps to preserve and protect assets.”

The company was valued at $3.25 billion as recently as November, offering customers the promise of high interest returns on cryptocurrency deposits.

At the time, the overall crypto market was experiencing a record-breaking rally that took its value close to $3 trillion. On Monday, it fell below $1 trillion for the first time since December 2020.

Celsius added that the measures were designed to “preserve and protect” its $11.8 billion in assets, with rival crypto lender Nexo offering to buy them.

Nexo co-founder Antoni Trenchev said on Monday that it had been in contact with Celsius “to discuss the acquisition of its collateralised loan portfolio”.

The Independent has reached out to Celsius for comment.

Leading cryptocurrency exchange Binance also announced a temporary halt on bitcoin withdrawals on Monday due to technical issues.

“Temporary pause of BTC withdrawals on Binance due to a stuck transaction causing a backlog,” Binance CEO Changpeng Zhao, known as CZ, wrote on Twitter.

“This is only impacting the bitcoin network. You can still withdraw bitcoin on other networks like BEP-20.”

The crypto turmoil coincides with severe drops across tech stocks, as rising interest rates and inflation cause investors to move away from riskier assets.

“Extreme volatility has swept across the cryptocurrency market, providing bitcoin, as a battle-hardened technology, with yet another opportunity to prove its metal,” analysts at the crypto exchange Bitfinex wrote in a note on Monday.

“A pervasive macroeconomic backdrop of spiralling levels of inflation and continued interest rate hikes from the US’s Federal Reserve is also weighing on the bitcoin price.”

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