Cryptocurrency Lending Firm Celsius Halts User Withdrawals
Celsius, one of the leading decentralized finance (DeFi) platforms and crypto lenders announced that it is pausing all user withdrawals, account transfers, and swaps. The announcement did not state what the company intends to do in the future. At the moment, Celsius has over 1.7 million users worldwide.
Speculations and rumors in the crypto circle suggest that Celsius has decided to deal with its liquidity crisis by unstaking nearly a quarter of a billion worth of wrapped Bitcoin from Aave and transferring it to the FTX exchange.
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Celsius receives flak from customers
Crypto investors and enthusiasts are looking at Celsius with uncertainty due to some pretty questionable moves in recent weeks. The latest announcement has left plenty of room for speculation as the project has been moving huge amounts of Ethereum, WBTC, and other crypto-assets apart from pausing user withdraws.
Many Celsius users have criticized the platform for the mismanagement of funds in this project, especially after the Anchor Protol collapsed on the Terra Classic blockchain. At the moment, the firm may be looking to address those issues as the focus on stabilizing liquidity takes the front seat.
Many experts who have followed this story are of the opinion that if Celcius fails, there is a high possibility that it would sell a major chunk of staked ETH, which would further hurt its value.
It appears that users may be tensed and eagerly waiting for the platform to reveal what the withdrawal pause means.
Unusual token movements on Celsius
The first traces of unusual token movements commenced at around 18:00 ET on 12th June from the firm’s DeFi wallet. At this point, the company was removing WBTC from the Aave lending and staking platform. Until now, around 9,500 WBTC tokens, valued at $247 million have already been redeemed from Aave.
After a chain of transactions, these tokens have been sent to the FTX exchange for reasons that are still unknown. Apart from WBTC, it also seems like that around 54, 749 ETH has been moved to FTX. Although these activities reflect poorly on the firm’s transparency, it could also mean that it is roping in efforts to stabilize liquidity by substituting volatile funds such as ETH and WBTC.
At the moment, Celsius has not given a roadmap as to what it will do with the cryptos that have been moved. Even crypto investors are not entirely impressed with the new round of FUD from Celsius. Time will tell how this story unfolds and when users can start withdrawing again.
Tell us what you think will happen next by leaving your comments below.
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