Celsius Halts Withdrawals, CEL Token Collapses

Popular cryptocurrency lending platform Celsius has halted all withdrawals, according to an announcement posted earlier this Monday.

The price of the native Celsius (CEL) token collapsed more than 50% on the news.     

It’s unclear when users will be able to withdraw their funds, but the company says that restoring this functionality is its “ultimate objective.”

Celsius has also disabled swaps and transfers between different accounts due to market conditions.  

Prior to the announcement, the lending platform withdrew roughly $250 million from decentralized finance protocol Aave and sent it to the FTX exchange. The reason behind such a move hasn’t been specified, prompting more speculation within the community.

On June 11, Alex Mashinsky, CEO of Celsius, claimed that rumors of users being unable to withdraw funds were “FUD and misinformation.” In a separate tweet, Mashinsky wrote that he had many enemies because he was winning.

As reported by U.Today, Celsius users started complaining en masse about withdrawal issues following the collapse of Terra in early May. However, the company assured its customers that their funds were safe.      

“It’s over. The Celsius Ponzi scheme has collapsed,” said Hindenburg Research founder Nathan Anderson. The head of the infamous short-selling firm has also recalled how the company initially refused to answer whether or not the company’s former chief financial officer Yarom Shalem had been arrested last November in Israel.

Last year, regulators from several U.S. states accused Celcius of flouting federal securities laws. 

Celsius had more than two million customers and $11.8 billion worth of assets under management as of May 17.   

The Celsius news has exacerbated the market rout, with Bitcoin, the largest cryptocurrency, revisiting the $25,000 level.