Crypto lender Celsius pauses withdrawals due to 'extreme market conditions'

cnbc.com:

Celsius, a controversial cryptocurrency lending platform, said Monday it was pausing all withdrawals, causing more pain in the fragile crypto market.

Celsius is one of the largest players in the nascent crypto lending space, with more than $8 billion lent out to clients and almost $12 billion in assets under management as of May. The group offers users higher-than-average interest rates on their deposits.

«Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts,» the company said in a memo to clients on Monday.

The move has raised concerns about Celsius' solvency. The firm has seen the value of its assets more than halve since October, when it handled $26 billion in client funds. Celsius' cel token has also erased 97% of its value in the same timeframe. Celsius is the biggest holder of cel.

«Acting in the interest of our community is our top priority,» Celsius said in the memo.

«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. Celsius has valuable assets and we are working diligently to meet our obligations.»

Celsius was not immediately available for additional comment on the situation when contacted by CNBC.

Bitcoin and other cryptocurrencies took a beating on the news. The world's biggest digital asset tumbled 8% to $25,287, according to Coin Metrics data, falling to lows not seen since December 2020. Ether dropped 8% to $1,329, while Celsius' cel token plunged more than 50%.

It comes hot on the heels of the $60 billion meltdown of hyped stablecoin terraUSD. The collapse heightened regulators' fears over crypto