Crypto Lender Celsius Network Suspends Withdrawals As Crypto Market Plunges by Double digits.
One of the world’s leading crypto lending platforms, Celsius, has suspended all transactions and withdrawals across its network, locking away approx. $12 billion overnight. This decision comes as major cryptocurrencies plummeted by double digits over the weekend.
Reportedly, Celsius manages over $11.8 billion in assets (May 17) and host a user base of 1.7 million users. It offers users annual yields of up to 18.63% on cryptocurrency deposits. Last year, Celsius raised $750 million in funding from investors, including Canadian pension fund Caisse de dépôt et placement du Québec.
How Does Celsius Network Work?
Celsius Network utilises capital deposited on its platform to fund its own investments, and in exchange, the firm pays users up to 30% interest weekly. But the recent crypto crash has diminished the potential returns Celsius can earn on its investments and has hampered the liquidity of its business model. As per Financial Times, the value of assets deposited on Celsius’s platform declined 50% between December and May, dropping from $24 billion to $ 12 billion.
In April, Celsius came under the radar of the regulatory authorities and stopped offering interest-bearing accounts to the non accredited investors of the U.S. Some market observers also believe that Celsius played a significant role in the collapse of Luna and terraUSD cryptocurrencies last month, which Celsius disputes.
Read: Solana Price Prediction