In an effort to prevent a repeat fund run that crashed Terra (LUNA) and TerraUSD (UST) just a few weeks ago, Celsius freezes all withdrawals or transactions of funds on deposit.
- This morning, the Celsius development team posted a statement on their website and sent an email to the 1.7 million account holders informed that all accounts are frozen indefinitely to prevent the collapse of the project.
- Celsius is a crypto service that offers decentralized banking and finance (deFi) services such as lending, gambling, and lending to users. The network’s native crypto CEL has plunged 63% in the last 24 hours according to CoinMarketCap.
- Media and social media reports claim that Friday’s higher-than-expected inflation for May caused a double-digit drop in cryptocurrencies, triggering a run on Celsius.
Investors in the Celsius crypto fintech platform and holders of its CEL digital asset woke up today to an announcement from the developers that users could not withdraw, trade or access their funds indefinitely.
1.7 million account holders reportedly received an emailed version of the official statement posted on the Celsius blog website, which called the unprecedented action “necessary” and blamed broader macroeconomic forces.
“Due to extreme market conditions, today we are announcing that Celsius will pause all withdrawals, trades, and transfers between accounts. We are taking this action today to put Celsius in a better position to meet its withdrawal obligations over time.” said the statement says. “We believe our decision to pause withdrawals, trades, and transfers between accounts is the most responsible action we can take to protect our community. We are working with a singular focus: protecting and preserving assets to meet our obligations to customers.” .
The message went on to state that the group is exploring a variety of ways to try to quickly restore account access to CEL holders who can only passively watch the value of the asset rebound without any ability to take any action.
Celsius falls more than 60% during the last day
While Celsius investors and CEL holders stand by helplessly, the CEL token, which runs on the Ethereum blockchain, has plunged 63% in the last 24 hours according to CoinMarketCap. It was trading as low as $0.1802 per token on cryptocurrency exchanges, falling from a high of $0.4982 over the past day.
Media and social media reports claim that Friday’s higher-than-expected inflation for May caused a double-digit drop across the entire cryptocurrency sector, negatively impacting the most valuable cryptocurrency projects, including Ethereum and Bitcoin. The spiraling price action appears to have started the run on funds from Celsius, which offers above-average returns to investors but appears to lack the funds to cover all deposits if they were all withdrawn at once.
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Is Celsius a purchase?
According to CoinMarketCap, CEL hit its all-time high of $8.02 last June and is currently priced 97% off from that peak. Every investor should know how much he can comfortably risk to invest, do his own research, and only seek financial advice from certified specialists. But in my opinion, there is too much uncertainty for anyone to invest in CEL at the moment, despite its ultra-low price.
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