Celsius, a popular cryptocurrency lending platform, announced on Monday that it was suspending all withdrawals, adding to the market’s already-stressed state. Cryptopolitan recently covered a post the Company posted on a blog.
In their announcement, Celsius stated that the firm Acting in the best interests of its community is its primary objective.
” Today, we are reporting that Celsius is halting all withdrawals, Swaps, and transfers between accounts due to extraordinary market conditions. As part of that promise and in accordance with our risk management system, we’ve triggered a section in our Terms of Use that permits this procedure to take place. We have substantial assets at Celsius, and we are working hard to meet our duties.”
The news has attracted mixed reactions in the Crypto world as well as tremendous effects in the industry. It’s not difficult to define ‘severe market conditions,’ as several deserving contenders exist. These include the recent collapse of the TerraUSD stablecoin and the announcement last Friday of a 40-year-high monthly inflation rate of 8.6 percent.
Impacts of Celsius pause on Crypto world
The collapse in the value of cryptocurrency was sparked by the Celsius move, with the total value falling below $1 trillion for the first time since January 2021. Over the weekend, Bitcoin, the most valuable cryptocurrency by market capitalization, fell 14% to below $23,000.
The Company’s in-house Cel coin plunged 70% within an hour of the news, indicating that the suspension in withdrawals, swaps, and transfers was a reflex to the market’s volatility.
Given that the suspension implies that investors who have money invested with Celsius are unable to withdraw their funds, the sharp reduction is unsurprising, especially given critics’ concerns about Celsius’s stability in the first place. According to Celsius, the Company has around $8 billion in deposits from 1.7 million investors. There is currently no timeframe for the end of the halt.
The reputation of crypto banks is increasing, as is the controversy surrounding them. Investor protection is a worry for regulators and critics, as are the hazards connected with lending unregulated items like bitcoins.
Celsius and other enterprises operate in a gray area due to a lack of clear regulation, with some opponents advocating for assets to be regulated by the Securities and Exchange Commission (SEC) to safeguard investors.
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