Celsius, a crypto lending platform, paused all withdrawals, swaps and transfers between accounts, the company announced on Monday. The decision was taken due to extreme volatility in the cryptocurrency market.
“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,” Celsius wrote in its blog post.
The platform highlighted that it wants to better position itself “to honor, over time, its withdrawal obligations.” However, it did not specify when it is going to resume the imposed withdrawal restrictions.
“In service of that commitment and to adhere to our risk management framework, we have activated a clause in our Terms of Use that will allow for this process to take place,” the announcement added.
“Our ultimate objective is stabilizing liquidity and restoring withdrawals, Swap and transfers between accounts as quickly as possible. There is a lot of work ahead as we consider various options, this process will take time, and there may be delays.”
Crypto Market Crash
The unexpected move by the crypto lending company pushed down the value of its native token by almost 50 percent. Meanwhile, Bitcoin shed more than eight percent in the last 24 hours and is now testing resistance at around $25,000 and Ether is at $1,270.
Meanwhile, Celsius faced regulatory backlash earlier. The company was slapped with a cease and desist order by the state regulator of Kentucky last year over its ‘Earn Interest Accounts’. Earlier this year, Celsius banned the transfers from non-accredited US investors, a move that was seen as a response to the regulatory backlash.
Further, the former CFO of the company, Yaron Shalem, was arrested in Israel last November which prompted his suspension and the appointment of Rod Bolger to the position.
