Fears of crypto infection spread after Celsius Network halts withdrawals

Author: Nishu June 14, 2022

Fears of crypto infection spread after Celsius Network halts withdrawals


The move by Celsius on Monday plunged cryptocurrencies for the first time since January 2021, taking their value below $1 trillion, raising concerns that the route could spread to other assets or affect other companies.

The move by Celsius on Monday plunged cryptocurrencies for the first time since January 2021, taking their value below $1 trillion, raising concerns that the route could spread to other assets or affect other companies.

Bitcoin fell as much as 14% on Monday after major US cryptocurrency lending firm Celsius Network halted withdrawals and transfers, citing “extreme” market conditions, in the latest sign of a financial market slowdown in the cryptosphere.

(Sign up for TODAY Cache, our technology newsletter, for insights on emerging topics at the intersection of technology, business and policy. Click here to subscribe for free.)

The move by Celsius on Monday plunged cryptocurrencies for the first time since January 2021, taking their value below $1 trillion, raising concerns that the route could spread to other assets or affect other companies.

“Almost anything can be settled in crypto… because the whole place is over-leveraged,” said Corey Klipston, chief executive officer of bitcoin savings platform Swan Bitcoin. “It’s all a house of cards.”

Celsius CEO Alex Mashinsky and Celsius did not respond to Reuters requests for comment.

New Jersey-based Celsius, which has approximately $11.8 billion in assets, offers interest-bearing products to customers who deposit cryptocurrencies with its platform. It then lends out cryptocurrencies to earn returns.

Following the Celsius announcement, bitcoin hit an 18-month low of $22,725 before a slight rebound to around $23,265. Number 2 token Ether fell 18% to $1,176, its lowest since January 2021.

Companies exposed to cryptocurrencies previously warned that the coin’s price could have ramifications, including triggering margin calls.

“It’s still an uncomfortable moment, and there are some contagious risks around crypto more broadly,” said Joseph Edwards, head of financial strategy at fund management firm Solarize Finance.

The crypto markets have taken a dive in the past few weeks as rising interest rates and rising inflation have prompted investors to abandon riskier assets in the financial markets.

Markets extended a selloff on Monday after US inflation data on Friday showed the biggest price increase since 1981, prompting investors to place their bets on Federal Reserve rate hikes.

This could be a major driver of the cryptocurrency market, Jay Hatfield, chief investment officer at Infrastructure Capital Management, wrote in a note on Monday.

“The overexpansion of its balance sheet by the Fed created many bubbles, including tech stocks, (and) crypto tokens,” he said.

Cryptocurrency investors are also worried about the May collapse of TeraUSD and Luna Token, shortly after Tether, the world’s largest stablecoin, broke its 1:1 peg against the dollar.

In a blog post on Monday, Tether said that while it has invested in Celsius, its lending activity with the crypto platform “has always exceeded” and has had no effect on Tether’s reserves. The token was last trading flat at $1.

Furthermore, on Monday, another crypto lending platform, BlockFi, said that it was laying off about 20% of its staff due to “dramatic changes in macroeconomic conditions”. BlockFi said it had nothing to do with Celsius.

Bitcoin, which surged in 2020 and 2021, is down nearly 50% so far this year. Ethereum is down over 67% this year.

crypto lending

Celsius stated on its website that customers who transfer their crypto to its platform can earn an annual return of up to 18.6%. The website urges customers to “earn more. Borrow less”.

In a blog post on Sunday evening, the company said it has halted withdrawals, as well as transfers between accounts, “to stabilize liquidity and operations while we take steps to preserve and protect assets.” “

“We are taking this action today to better position Celsius to honor its withdrawal obligations, over time, over time,” the company said.

Based on CoinGecko data, the Celsius coin is down about 97% over the past 12 months, down from $7 to around 20 cents.

‘Grey Area’

Crypto lending products have grown in popularity and many companies have launched offerings within the past year.

This has raised concerns among regulators who are concerned about the safety of investors and systemic risks from unregulated lending products.

Matthew Nieman of CMS Law Firm said Celsius and the crypto firm that provides similar services operate in a regulatory “grey area”.

Celsius last year raised $750 million in funding from investors including Cais de Depot et Placement du Québec, Canada’s second largest pension fund. At that time the value of Celsius was $3.25 billion.

As of May 17, Celsius had $11.8 billion in assets, its website said, less than half of what it was in October, and had processed loans totaling $8.2 billion.

In October last year, CEO Mashinsky was quoted as saying that Celsius has assets of more than $25 billion.

Rival crypto lender Nexo said on Monday that it had offered to buy the outstanding assets of Celsius.

“We reached out to Celsius on Sunday morning to discuss the acquisition of its collateralized loan portfolio. So far, Celsius has opted not to engage,” said Nexo co-founder Antoine Trenchev.

Celsius did not respond to a request for comment on Nexo’s proposal.

14 June, 2022, 1:51 pm

News Cinema on twitter News Cinema on facebook

Tuesday, 14th June 2022

More Stories
Crew Opens Dragon and Unpacks New Bone, Skin Healing Experiments
Mother shares shocking images of the inside of her damp-ridden council flat
Ivanka Trump heads to the gym after flying home from the World Cup in Qatar
Bigg Boss 16, Day 57 Updates: The ‘Uttaran’ actress is angry as Shiv chose Nimirith as the new captain instead of Tina!
NASA’s Artemis 1 spacecraft breaks a record set by Apollo 13 in 1970
Next big Covid variant will be more deadly, according to new study of immuno-compromised patient
DNA Exclusive: Analysis of protests against Xi Jinping’s ‘zero Covid’ policy in China
Los Angeles city councilman says homeless crisis means children ‘step over needles, human waste’
Jay Leno, 72, HITS police car en-route to comeback stage performance
Tony Blair tells LGBT campaigners not to ‘disrespect’ World Cup hosts Qatar
New York’s Best Wine Bars
Idaho police say they are yet to corroborate whether one victim had a stalker.
US Team Distances Itself From Federation’s Decision to Alter Iran Flag
DAN WOOTTON: Xi’s sick and deranged Zero Covid policy destroying his country is finally crumbling
Forensic scientist reveals he used PIG SKIN to test theory about Jeremy Bamber case
Fat cat parking bosses rake in DOUBLE the PM’s £164K salary while slapping record fines on motorists
The fans screamed for Qatar. Their passion hid a secret.
Forecasters Warn of Tornado Threat Across the South
Elon Musk shows off his bedside table
Jill Biden unveils White House Christmas decorations
Cardboard Has Taken Over Our Lives. Where does it come from?
Sympathy, and Job Offers, for Twitter’s Misinformation Experts
Twitter hack sees 5.4 MILLION phone numbers and email addresses leaked on the dark web
Organ Donations Spike Around Motorcycle Rallies
Obsessive stalker who targeted Claire Foy is told he faces deportation after he entered UK illegally
Woman kidnapped as a toddler in 1971 finds family 10 minutes from where she grew up in Fort Worth
Youngest of Walmart mass shooting’s six victims was 16-year-old honors student
Mauna Loa Volcano in Hawaii Erupts for the First Time in Nearly 40 Years
Iranian journalists hijack World Cup press conference to ask US players of
Crypto Lender BlockFi Files for Bankruptcy as FTX Fallout Spreads
Buffalo Gunman Expected to Plead Guilty Today in Racist Attack
Bridgend baby deaths: Police arrest three and cordon off home after shocking discovery
IFFI: Megastar Chiranjeevi was awarded the Indian Film Personality Award
Tanning addict who used sunbeds WHILE battling cancer details ‘excruciatingly painful’ treatment
What next for I’m a Celeb jungle stars? Jill Scott
Kashmir Mahajani signed for Nushrat Bharuchha’s ‘Soori 2’
National Grid could activate emergency winter plan to PAY homeowners to use less power TOMORROW
Abdu Rozic receives backlash from fans for defaming Shalin Banot!
Yuzvendra Chahal turns ‘coolie’ for Dhanashree Verma in Shikhar Dhawan’s new film – watch
Scientists genetically modify a tobacco plant to produce COCAINE in its leaves
Bigg Boss 16: Tina breaks down on birthday, ugly split at nomination task!
Meghan Markle’s low-key Thanksgiving! Duchess prepared lunch for 300 homeless women in Los Angeles