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DeFi lending giant Celsius halts withdrawals

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The Celsius Network, a decentralized finance (DeFi) platform and one of the largest crypto lenders, announced Sunday night that it was “pausing all withdrawals, Swap, and transfers between accounts.” It has 1.7 million customers.

The company’s token, CEL, is trading at 23 cents as of this writing, according to CoinMarketCap. That’s a 92 percent decrease from April 8th, when CEL was worth $3. The token was worth nearly $7 a year ago.

There have been questions about Celsius Networks’ high yields, its connections to failed stablecoin Terra, and its reserves. The value of assets on its platform dropped by half to $12 billion in May, from $24 billion in December 2021. Between March and May, a billion dollars flowed out of the system, The Financial Times reported.

In a June 7th blog post entitled “Damn the torpedoes,” the company said, “Celsius has the reserves (and more than enough ETH) to meet obligations, as dictated by our comprehensive liquidity risk management framework.”

That was then. On June 12th, an email to all customers started off like this:

Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts. We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.

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