Major crypto lending platform Celsius on Monday announced it was suspending all withdrawals due to “extreme market conditions,” triggering a major selloff in the cryptocurrency market with Bitcoin dropping dropping more than 9%.
In a blog post on Monday, Celsius said it was “pausing all withdrawals, [currency] swap, and transfers between accounts,” noting that it was doing so to allow itself to meet all of its withdrawal obligations in the future.
The company said its action will “stabilize liquidity and operations while we take steps to preserve and protect assets,” and added that its customers will continue to accrue rewards during the freeze.
According to its website, Celsius claims it held $11.8 billion in assets as of May 17, has processed $8.2 billion in loans and has around 1.7 million customers.
Following the announcement, the value of Celsius’ own token (CEL) slumped by more than 50%, and as of early Monday morning, it was trading below 20 cents—massively down from around $2 in early May and $7 in June last year.
Celsius’ announcement also triggered a selloff in the wider cryptocurrency market with Bitcoin dropping below $25,000, its lowest level since December 2020.
The suspension of withdrawals comes just a day after Celsius founder and CEO Alex Mashinsky hit out at critics on Twitter, accusing them of spreading misinformation and FUD—a popular crypto acronym for “Fear, Uncertainty, Doubt.” Responding to a tweet by Mike Dudas, the founder of crypto news outlet The Block, Mashinsky wrote: “Mike do you know even one person who has a problem withdrawing from Celsius?… If you are paid for this then let everyone know you are picking sides.”