Crypto Lending Firm Celsius Pauses Withdrawals, Tanks 50%

Crypto staking and lending platform Celsius has paused all withdrawals, swaps, and transfers between accounts because of what it called “extreme market conditions.”

“We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations,” the company said in a blog post on Medium, an online publishing platform.

“We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets. Furthermore, customers will continue to accrue rewards during the pause in line with our commitment to our customers,” the company said.

According to a recent report by the Financial Times, the firm, led by American entrepreneur Alex Mashinsky, had about $12 billion in customer assets as of May across 1.7 million users.

The price of Celsius's native Celsius token crashed 52% to $0.17 on news of the move.

According to speculation on social media, Celsius has unstaked $247 million worth of Wrapped Bitcoin from Aave and sent it to the FTX cryptocurrency derivatives exchange.

Wrapped Bitcoin is a modified version of bitcon equal to it in price that can be used on Ethereum, an open-source blockchain, or digital ledger,

Aave is a decentralized lending protocol that lets users lend or borrow cryptocorrency without going to a centralized intermediary.

Also, Celsius has moved large amounts of Wrapped Bitcoin (WBTC), Ethereum, and other cryptocurrencies while simultaneously a pause has been placed on withdrawals by users.

In unusual movements, cryptos from the mail DeFi (Decentralised Finance) wallet of Celsius began moving liquidity to FTX at 18:00 ET on June 12, as WBTC was removed from Celsius’s main Aave staking and lending platform.

The company had earned interest on its deposits stored in its DeFi wallet.

According to users, 9,500 WBTC tokens worth $247 million have been moved from Aave to the FTX exchange. Also, 54,749 Ethereum worth $74.5 million has been moved to FTX.

While demanding answers for the funds' movement, users claim that the Celsius board is not transparent with its dealings.

The firm has been accused of moving $320 million worth of liquidity to the FTX exchange.