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. 

SEE ALSO: Square Enix’s president pins company’s hope on blockchain despite criticism

Feature Image Source: rawpixel.com

Karandeep V

Karandeep was born in Pune, Maharashtra, an upcoming metropolitan city in the Western region of India. While most members of his family are engineers, he had different ideas. He was more inclined toward exploring the non-technical aspects of a business, which is why he studied Bachelors of Business Administration at Symbiosis International University, Pune.  Having said that, his love for new and upcoming technologies remained intact, which is why he has written extensively about technology throughout his career. After a brief stint with a gaming company at the beginning of his career, he discovered that his love for writing was not temporary.  Being a tech geek, he always liked installing and playing around with new applications on his mobile devices and the home desktop. He was fascinated by how technology can simplify even the most mundane and complex tasks with just a few commands. He keeps a close eye on how businesses use different tools to streamline their operations to boost productivity and efficiency.  At ToolsMetric, he writes product reviews that cover the main features and specifications of different enterprise applications. The sheer amount of innovation and hard work that goes into building these tech solutions is one of the reasons why Karandeep loves reviewing these tools. Besides product reviews, he also writes interesting news articles and blogs that track the latest developments in the tech industry.  When he is not writing, you can find him rooted to his seat playing video games, watching movies, or supporting his favorite football team. Since his childhood, he has always loved to travel and explore new places. Traveling is a major part of his life due to a myriad of reasons such as experiencing new cultures, food, and traditions. His other hobbies include playing football, cooking, and running.  You can find him on LinkedIn here.

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