On Monday, June 13, 2022, the crypto economy fell below the $1 trillion region as a large majority of crypto assets lost between 10% and 25% in the past 24 hours. Meanwhile, the crypto community discussed the Celsius cryptocurrency lending app as insolvency rumors swirled. On June 12, around 10:10 p.m. (ET), Celsius announced that it had suspended “all withdrawals, exchanges and transfers between accounts”.
Celsius Halts Lending App Operations, Crypto Community Talks About Possible Insolvency, Liquidations
On Sunday evening, lending firm Celsius posted a tweet detailing the specific operations on the platform that have been halted. “Due to extreme market conditions, we are announcing today that Celsius is suspending all withdrawals, exchanges and transfers between accounts,” Celsius revealed.
“We are taking this step today to put Celsius in a better position to meet, over time, its withdrawal obligations,” Celsius added. The company also published a blog post explaining that Celsius was taking steps to remedy the situation.
“We are taking this necessary action for the benefit of our entire community to stabilize liquidity and operations while taking steps to preserve and protect assets,” the Celsius said. blog post Remarks. “Additionally, customers will continue to earn rewards during the break in line with our commitment to our customers.”
There are rumors that Celsius may be insolvent and speculation about the company’s money troubles began long before the company suspended operations. Former CEO of news publication The Block Crypto, Mike Dudas, tweeted about Celsius’ “disappearance” the day before the company halted withdrawals.
“I am saddened by the number of people who applaud the disappearance of [Celsius Network]tweeted Dudas. “As well as many others, I have advised people not to put their funds in this risky business. However, many have, and a slew of retailers appear to be on the verge of being rekted. We all lose.
However, the founder and CEO of Celsius, Alex Mashinsky, seemed offended by Dudas’ tweet and replied. “Mike, do you know at least one person who is having trouble withdrawing from Celsius? » Mashinsky asked. “Why spread FUD and misinformation? If you get paid for this, let everyone know you choose your side, otherwise our job is to fight Tradfi together…”
Additionally, there is speculation that approximately $500 million of Celsius’ funds are locked in the Maker Protocol for leverage. “Celsius Network has 17,919 WBTC mined in the Maker Protocol”, an individual on Twitter wrote. “This position faces liquidation at $22,584/$BTC. A DAI debt of $278 million, making it the largest individual debt position on the protocol.
Blockstream’s Adam Back replied to the tweet and said, “I guess it’s a challenge BTC performance strategy. Can not [Celsius Network] remove the DAI from any yield/staking it is in, then unpack the DAI and pull out the WBTC? I hope there is no duration block on DAI staking,” Back added.
Estimates Show Over $1 Billion Held in Celsius Wallets, Crypto Lender Nexo Offers to Buy Celsius Assets
Block Crypto Vice President of Research Larry Cermak compiled a database of Celsius wallets and came to the conclusion that there was $1.5 billion in those accounts. “Please keep in mind that there might be errors. The list may not be complete and I may have mislabeled some over the years of tracking,” Cermak added.
another individual compiled Cermak list and found approximately $1.3 billion residing on Celsius wallets. On top of all the rumors and speculation, a Celsius competitor has offered to buy the company’s assets. Nexo AG has submitted an open letter to the Celsius Network with a formal offer.
“After what appears to be the insolvency of [Celsius Network] and aware of the repercussions for their retail investors [and] the crypto community, Nexo has extended a formal offer to acquire assets qualified as [Celsius Network] after their withdrawal freeze,” Nexo Explain with the letter attached to the tweet.
“[We’ve been] Operating a sustainable business for over 4 years, based on strong fundamentals and prudent risk management, Nexo is in a strong liquidity and equity position, as evidenced by the only real-time reserves attestation from a blockchain finance company,” the company said. added.
The company concluded that obtaining some or all of Celsius’ assets “will go a long way in providing immediate liquidity to [Celsius Network].” Nexo said it is still awaiting a response from Celsius Network’s management team regarding the formal offer.
What do you think of the situation surrounding Celsius Network? Let us know what you think about this topic in the comments section below.
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