Celsius Freezes User Funds
Celsius is a cryptocurrency lending firm best known for offering clients lucrative yields on assets such as Bitcoin and Ethereum.
It is part of a growing group of firms that operate in the so-called “CeFi” sphere, leveraging the DeFi space while acting as a centralized custodial service for cryptocurrency holders. It is essentially a centralized entity.
This comes after weeks of rumors that the crypto lender could be facing bankruptcy due to the crypto market downturn.
According to a June 12 blog post, Celsius has suspended customer withdrawals, swaps, and transfers due to “extreme market conditions”.
The firm said it took the drastic action “to put Celsius in a better position to meet its withdrawal obligations over time”, and added:
“Acting in the best interests of our community is our top priority. In service of this commitment, and to adhere to our risk management framework, we have activated a clause in our terms of service that will allow this process to take place.
Celsius has valuable assets and we are working diligently to meet our obligations.”
The company said it will work to stabilize liquidity during the shutdown to preserve its assets, adding that it views this action as the “most responsible” way to serve its customers.
To offer clients enhanced returns, Celsius deposits funds into DeFi protocols. However, recent market volatility has impacted its ability to offer the insane returns it once promised, sparking widespread speculation in the crypto community that it could face insolvency issues. Those rumors intensified this week when ETH pledged to Lido lost parity with Ethereum, raising suspicions that Celsius may have been selling its stETH tokens in a desperate attempt to pay off customers.
Celsius CEO Alex Mashinsky has repeatedly denied the insolvency claims in recent weeks.
Andrey Kunev
Reporter at CoinsPress
Andrey Kunev is a knowledgeable cryptocurrency content creator passionate about the crypto market. With extensive experience in market analysis and investment reporting, Andrey is a valuable asset to the CoinsPress team. As a frequent contributor, he offers insightful and comprehensive coverage of market trends, price fluctuations, and new advancements in cryptocurrency. Whether you're a seasoned investor or just getting started, Andrey's clear and concise writing offers a comprehensive look at the current state of the crypto market and its prospects. Stay up-to-date with CoinsPress's expert analysis and commentary on all things cryptocurrency.
