Celsius

Celsius Plummets Over 40% After Halting All Withdrawals and Experiencing Difficulties Days Prior

Celsius burning

Celsius is in deep trouble

Lending platform Celsius Network has announced a halt to all withdrawals and transfers. This means that the money locked up by investors is now inaccessible to them until further notice. They explained in a Medium post that current market situations pushed them to make the decision. The price of CEL, the native Ethereum token of Celsius, has plummeted over 40%, from $0.40 a day ago to $0.19. Bitcoin has since taken a dive to $25,000.

The company stated that they would continue providing rewards to users, saying: "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."

Whether they will be able to pay out those rewards to investors eventually is the real question. 

The next Terra?

While they have conveyed that that situation is not dire in the Medium article, other circumstantial evidence may say otherwise. On Twitter, Decrypt executive editor Jeff Roberts revealed that Celsius CEO Alex Mashinsky told him that he could borrow money from them. 

 

 

A Twitter user also told Celsius two days prior to this announcement that withdrawals were not working then - and they tried to help him, but it's unclear whether he received his funds or if he and other users got caught up in this situation too.

 

 

The company itself appears to be going downhill fast, since the CEO only a month ago stated that they had prepared for over a year for a situation like this, while the situation is looking dire now. The reasoning in the blog post also confirms this.

Given the situation, the most honest course of action would have been to give some information pre-hand so that investors could prepare and move their funds. It hasn't even been two months since the Terra crash, and Celsius is already moving closer to that direction. Only this time, users may not be able to retrieve their money if the situation gets worse.

Cryptohopper