as 14% on Monday after major US cryptocurrency lending company Celsius Network froze withdrawals and transfers citing “extreme” market conditions, in the latest sign of the financial market downturn hitting the crypto space.
New Jersey-based Celsius, which has around $11.8-billion in assets, offers interest-bearing products to customers who deposit cryptocurrencies with its platform. It then lends out cryptocurrencies to earn a return. “It’s still an uncomfortable moment, and there’s some contagion risk around crypto more broadly,” said Joseph Edwards, head of financial strategy at fund management firm Solrise Finance.
Cryptocurrency investors have also been rattled by the collapse of the TerraUSD and Luna tokens in May, which was shortly followed by Tether, the world’s largest stablecoin, briefly breaking its 1:1 peg with the dollar. Bitcoin, which surged in 2020 and 2021, is down around 50% so far this year. Ether is down more than 67%.
“We are taking this action today to put Celsius in a better position to honour, over time, its withdrawal obligations,” the company said. Celsius’s token has fallen about 97% in the last 12 months, from $7 to around 20c, based on CoinGecko data.
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