Crypto Lending Firm Celsius Requests Extra Time To Fix Concerns After Halting Withdrawals

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Celsius, a crypto lending platform reported that they are pausing all withdrawals on Monday. They say that “it will take time to stabilize its liquidity”. Celsius is one of the largest crypto lending platforms based in New Jersey. The directors of the company said, “We want our community to know that our objective continues to be stabilizing our liquidity and operations. This process will take time. As has been a priority since our company’s inception, we maintain an open dialogue with regulators and officials. We plan to continue working with regulators and officials regarding this pause and our company’s determination to find a resolution”. 

The Celsius lending platform has announced this pausing in all withdrawals, Swaps, and transfers between accounts due to the extreme crypto market conditions. But this raised concerns in crypto investors about Celsius’ solvency. The cel toke of Celsius crypto has erased around 97% of its value and they are the biggest holder of cel. Cel token allows the investors to buy and earn rewards and to get various discount offers on lending rates.

Crypto Lending Firm Celsius Requests Extra Time To Fix Concerns After Halting Withdrawals

The memo published by Celsius reported, “acting in the interest of our community is our top priority. 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 crypto has valuable assets and we are working diligently to meet our obligations”.

Celsius Requests Extra Time To Fix Concerns After Halting Withdrawals

In fact, last week, the company announced that they do not have any issues meeting the withdrawal requests. Last April, the boss of Celsius crypto, Alex Mashinsky said, “My company holds on average 300% collateral for each loan it offers to retail investors, while for institutional investors it issues undercollateralized loans. We have been doing this for five years now, longer than anybody else. The business is doing very well”.

Crypto hedge fund Three Arrows Capital faced a large loss and another crypto lender, Babel Finance also suffered from losses. As like Celsius crypto has done, they both have also paused their withdrawals. Last Sunday, Solend, a crypto lending app performing in the Solana blockchain announced a temporary takeover of the account which threatened a large user about the liquidation. 

Celsius’ website said, “We’re taking this measure to better meet our withdrawal responsibilities over time.” The users will continue to accrue rewards during the pause”. Celsius is one of the major crypto lending platforms and has raised around $750 million in funding. Apart from crypto lending, they offer interest-bearing products and services to their customers. Meanwhile, Nexo, a London-based competitor of Celsius crypto, said on Twitter that it is ready to purchase Celsius’s qualifying assets.

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Fred Harris is a writer and performer who got involved in cryptocurrencies at the start of 2017 when he was hired to work at a Bitcoin-related company. He's passionate about cryptocurrency, digital rights, IT, and tech and has been an avid writer and follower of the crypto and blockchain space since 2015. He is specialized in machine learning, artificial intelligence, blockchain technology, and big data.

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