Celsius in turmoil?
In a tweet accompanied by a blog post, the lending platform Celsius announced pausing withdrawals, swaps and cryptocurrency transfers between accounts on its platform due to “ extreme market conditions » :
“We are taking this step today to put Celsius in a better position to meet its withdrawal obligations over time,”
.@CelsiusNetwork suspends all withdrawals, exchanges and transfers between accounts. Acting in the interest of our community is our top priority. Our operations are continuing and we will continue to share information with the community. More here: https://t.co/CvjORUICs2
— Celsius (@CelsiusNetwork) June 13, 2022
The announcement follows a drop in cryptocurrency prices over the weekend and comments on Twitter that Celsius Network users are facing a cash crunch.
Indeed, Celsius users have criticized the platform for how they believe she mismanaged her funds following the collapse of the Terra ecosystem and its stablecoin UST.
According to some, if Celsius came to falter, the platform would be forced to sell its large amount of stETHwhich could accelerate the reduction that Ether is already experiencing.
As a reminder, stETH is a token issued by the Lido lending platform, which certifies that a user has indeed staked ETH within the framework of Ethereum 2.0.
An overdue CEL token
Following the news, the price of CEL, the token of Celsius, immediately followed a fall, collapsing by $0.365 to nearly $0.09that is a drop of more than 75% in just 20 minutes.
At the time of writing these lines, the price of the CEL token is around $0.20 and is trying somehow to go up the slope:
Evolution of the price of the CEL token since the announcement of Celsius
Celsius retains in its press release that this difficult decision was taken to protect its users and meet its obligations:
“We understand that this announcement is painful, but we believe that our decision to suspend withdrawals, swaps and transfers between accounts is the most responsible action we can take to protect our community. We work with one goal: to protect and preserve assets to meet our obligations to our customers. »
Whatever, the Celsius platform might not be an isolated case. It remains to be seen whether BlockFi or Nexo, to name a few, will make similar decisions in the coming days.
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Source: Celsius Blog Chart Source: TradingView
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