Monday, February 26, 2024

Celsius Drops 70% In 1 Hour After Stopping Withdrawals: Report

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Celsius drops 70% in one hour after stopping platform withdrawals on Sunday night due to liquidity issues so let’s read more today in our latest cryptocurrency news.

On Sunday night, the crypto market was already in a freefall, and the controversial lender Celsius announced it to be pausing all customer withdrawals, transfers, and swaps because of a liquidity issue. The platform noted:

“We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations. 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’s CEL token reacted quickly and dropped 70% in one hour from the previous $0.49 and then hit $0.15. The crypto investors on Twitter made a comparison with the recent Terra collapse and the infamous scheme Bitconnect. The rest of the market didn’t have a good day as well when Celsius shared the news but it was nothing compared to the CEL dramatic drop.  Celsius drops 70% and BTC was down by 9% at the time of writing. ETH was also down by 9% and Cardano by 11%.

Celsius launched in 2017 and offered customers high yields for crypto deposits which were lent out to other crypto companies. It shared the business with Nexo and BlockFi and in the past year, most regulators made clear that they see these high-yield lending products as unregistered securities offerings. However, by September, four states sent Celsius cease and desist letters, and that month, Celsius shuttered its own planned product after the SEC threatened a lawsuit.

BlcokFi paid $100 million to settle with the US SEC and 32 states agreed to properly register its investment products for the SEC approval so its peers Nexo and Celsius haven’t announced similar settlements or plans now. In response to the Celsius developments, BlockFi CEO Zac Prince noted that all services will continue to operate normally. Celsius CEO Alex Mashinsky was silent on Twitter and only shared the official company’s blog post.

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