Cryptocurrency lending company Celsius Network on Monday suspended bitcoin (BTC) withdrawals and transfers citing “extreme conditions” in the markets.
Celsius Network’s announcement triggered a drop in the cryptocurrency market, whose capitalization fell below $1 trillion for the first time since January 2021, Reuters reported.
The price of bitcoin hit an 18-month low and this Monday stands at $23,536, as indicated by CoinMarketCap. The price of ethereum (ETH) fell to $1,246, its lowest level since January 2021.
The news agency pointed out that the value of cryptocurrencies has been plummeting due to a rise in interest rates and inflation that led investors to dump riskier digital assets in the markets.
Another cause that affected the value of cryptocurrencies is the high inflation rate in the United States.
In the month of May, the North American country reached 8.6 percent annual inflation, according to the Consumer Price Index (CPI) which represents the highest value reached since December 1981.
“It’s still an uncomfortable time and there is some risk of contagion around cryptocurrencies in general,” warned Joseph Edwards, chief financial strategist at Solrise Finance.
Crypto loans
Celsius Network offers interest-bearing products to customers who deposit cryptocurrencies on its platform. It then lends digital assets for a return.
Customers who deposit their cryptocurrencies on the platform can earn an annual return of up to 18.6%. “Earn a lot. Borrow little,” goes the company’s slogan.
However, this Monday they froze withdrawals and transfers from the platform “to stabilize liquidity and operations while we take steps to preserve and protect assets.”
According to CoinGecko data, the Celsius token used by borrowers and lenders has fallen about 97% in the last 12 months. It went from $7 to 20 cents.
Celsius is not subject to regulation
CMS law firm member Matthew Nyman said Celsius Network is not subject to “clear regulation” requiring disclosure of its assets.
The U.S. company raised $750 million in funding from investors in 2021, including Canada’s second-largest pension fund, Caisse de Dépôt et Placement du Québec.
Celsius was valued at $3.25 billion. However, in May 2021 the company had $11.8 billion in assets that were not subject to regulation.
According to, Alex Mashinsky, CEO of Celsius Network, the US company has more than $25 billion in assets.
Binance resumes withdrawals on the Bitcoin network
After a suspension of almost four hours, Binance resumed this Monday at noon the service of withdrawals on the Bitcoin (BTC) network, even though it had announced that it would take only 30 minutes.
Through a statement, the exchange indicated that they are still working to process the pending withdrawals on the Bitcoin network.
Binance has temporarily paused #Bitcoin withdrawals on the $BTC network. Meanwhile, you can still withdraw BTC on other networks.
This is due to a stuck on-chain transaction. Our team is currently working on a solution and will provide further updates soon.
— Binance (@binance) June 13, 2022
It noted that 100% network uptime will be completed within the next few hours.
Binance users should note that pending withdrawals on the Bitcoin network will be rejected. In this case, they will need to re-process their withdrawal requests.