Bitcoin slide after crypto lender disables Celsius network withdrawals

LONDON, June 13 (Reuters) – The Celsius Network, America’s leading cryptocurrency lender, fell on Monday after it withdrew withdrawals and transfers, citing “serious” conditions, as the latest indication of how the financial market turmoil is causing distress in the cryptosphere.

The move by Celsius triggered a fall across cryptocurrencies, with their value falling below $ 1 trillion on Monday for the first time since January last year, with the largest token bitcoin falling 11%.

Following Celsius’ announcement, Bitcoin touched an 18-month low of $ 23,476. The No.2 token ether was down 16% to $ 1,177, the lowest level since January 2021.

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Joseph Edwards, head of financial strategy at financial management firm SolRice Finance, said: “This is still an embarrassing moment, and there is some risk of infection around crypto.

Celsius offers interest-bearing products to customers who deposit cryptocurrencies on its site and then lend them cryptocurrencies to earn income.

In a blog post, the company said it had disabled cash withdrawals and transactions between accounts “in order to stabilize cash flow and operations while taking action to protect and secure assets.”

“Over time, we are taking this step today to put Celsius in a better position to respect its withdrawal obligations,” the New Jersey-based company said.

‘Gray Area’

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Matthew Nyman of CMS Law Firm said Celsius and Crypto, which provide services such as banks, were in the “gray area” of regulation. “They are not subject to any clear regulation, it is necessary to disclose their assets.”

Chelsea CEO Alex Mashinski and Chelsea did not immediately respond to Reuters requests for comment outside US business hours.

Celsius raised $ 750 million at the end of November from investors, including Caisse de Dépôt et Placement du Québec, Canada’s second largest pension fund. Celsius was then valued at $ 3.25 billion.

As of May 17, Celsius had assets of $ 11.8 billion, and its website had halved since October, operating a total of $ 8.2 billion in debt.

Mashinsky, the CEO, said in October last year that Celsius had assets of more than $ 25 billion.

The company’s website, which encourages customers to “earn more, borrow less”, offers interest rates of up to 18.6%.

Competitor Crypto Lender Nexus said Monday it offered to buy Celsius’ outstanding assets.

“We approached Celsius on Sunday morning to discuss the acquisition of its network credit portfolio. So far, Celsius has chosen not to get involved,” said Nexo co-founder Antoni Trenchev.

Celsius did not immediately respond to a request for comment on Nexo’s offer.

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Report by Tom Wilson and Elizabeth Howcraft in London; Additional report by Abhinaya Vijayaragavan in Bangalore and Alun John in Hong Kong; Editing by Bradley Beret and Jane Merriman

Our standards: Thomson Reuters Trust Principles.

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