To maintain liquidity and operations while we take efforts to safeguard and secure assets, Celsius Network has temporarily halted withdrawals of bitcoin deposits from its platform, the business stated in a note to clients Sunday evening.
New Jersey-based Blockchain, which had $11.8 billion in bitcoin deposits on its platform as of mid-May, has suffered a major setback. The business accepts cryptocurrency deposits and offers up to an annual interest rate of 18.6 percent to investors. Securities authorities in the United States are pursuing the firm for allegedly selling securities without properly registering and disclosing risks to investors, in contrast to deposits in a bank, which are federally guaranteed.
Due to “extreme market circumstances,” the business announced in a “Memo to the Celsius Community,” withdrawals are being stopped “to better position the company to fulfill withdrawals later.” According to the firm, consumers will still be able to collect interest on their crypto holdings even if they cannot remove them from the site.
According to the document, “there is a lot of work ahead as we explore alternative solutions,” this process will take time and there may be delays.
Celsius has been dealing with a variety of issues lately. Its token, dubbed CEL, fell in May, resulting in the liquidation of many clients who had used it as collateral. As of late, the corporation has also lost cryptocurrency in hacks of decentralized finance protocols to which it had contributed funds.
Customers’ bitcoin was loaned to institutional investors ready to pay even more interest, according to previous statements by company officials. Securities and Exchange Commission (SEC) officials have also alleged in enforcement proceedings against Celsius that the firm participated in proprietary trading and utilized client cash as collateral for its own borrowing, as well as trading. In May, the business announced that it will go public with a crypto mining subsidiary it had established.
In April, the firm announced that it will no longer pay interest on new deposits from non-accredited investors in the United States.
Companies like WestCap and Caisse de depot et placement du Québec, Canada’s second-biggest pension fund, invested $400 million in the business in October of last year and put a $3 billion value on it.
On Sunday evening, the CEL token was trading at roughly 18 cents, down by half in the prior 24 hours and by 98 percent from its peak of nearly $8 in June.
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