Cryptocurrency platform Celsius halts withdrawals

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Israeli-US cryptocurrency platform Celsius has announced that it is suspending all withdrawals, swaps and transfers from the accounts of its investors. In its announcement, Celsius said that it was taking this action for the benefit of the community, and that it would continue to provide information to its customers. The announcement comes after its currency has fallen 95% over the past year.

Celsius, which was founded by Israeli entrepreneurs Daniel Leon and Nuke Goldstein and CEO Alexmasinsky and is mainly engaged in banking operations. Customers can deposit cryptocurrency with Celsius for interest and the company also extends loans against cryptocurrency deposits. Celsius has been offering high returns of 15% annually on average on deposits, in a practice called “striking,” which has come in form major criticism since the collapse of the previously stable cryptocurrency Luna.

Celsius has grown rapidly in recent years but the upheaval it is undergoing can be clearly seen from its own website. According to the website, at the end of March the company was managing assets worth US$19.1bil (RM84.5bil) for 1.6 million customers. But the website now says that it currently manages assets of 151.53 bitcoin, worth about US$5bil (RM22bil). Last October, Celsius raised US$400mil (RM1.77bil) at a company valuation of US$3bil (RM13.27bil). In addition to licensing problems, Celsius is coping with other challenges such as security challenges, after a cybersecurity breach last December led to the loss of US$54mil (RM238.8mil) of its assets.

In addition to licensing problems, Celsius is coping with other challenges such as security challenges, after a cybersecurity breach last December led to the loss of US$54mil (RM238.8mil) of its assets.

Celsius’s own CEL cryptocurrency fell as low as US$0.088 (RM3.89) after the announcement that it was halting withdrawals but has recovered somewhat to US$0.3 (RM1.33).

Celsius said, “Due to extreme market conditions, we have been forced to announce the complete halt of all withdrawals and SWAP transactions in customer accounts. The aim of this measures is to allow the company to stabilise liquidity and operations while we take steps to preserve and protect assets.” – Globes, Tel Aviv, Israel/Tribune News Service