By Senad Karaahmetovic
Crypto lender Celsius Network has paused withdrawals on Monday, citing “extreme market conditions.” This move comes after the crypto market’s total market cap dropped below $1 trillion over the weekend.
Celsius, one of the more significant names in the crypto lending space, offers interest-bearing products to customers who deposit their crypto assets and provides crypto lending services.
The crypto lender secured $750 million last November from a group of investors, including the second-largest pension fund in Canada. The startup's valuation rose to $3.25 billion after raising the funds.
Celsius published a blog post saying it had frozen crypto withdrawals and paused transfer accounts "to stabilize liquidity and operations while we take steps to preserve and protect assets."
"We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations."
The move marks a sharp U-turn for Celsius after the company saw exceptional growth last year, driven by low-interest rates and significant expansion of crypto markets.
Bitcoin and other crypto assets saw a sharp drop over the weekend, with the world’s largest cryptocurrency plunging below $24,000 Monday as investors abandoned risk assets.
The sell-off wiped over $200 billion off the entire crypto market, pushing its market cap below $1 trillion for the first time since February 2021.
The latest drop in crypto prices came after the latest consumer price index (CPI) data, which serves to gauge inflation, rose to 8.6% in May, its fastest rate since 1981. The expectations of another rate hike this week by the Fed are now adding to the market bearishness.