# Crypto Lender Celsius Stops Withdrawals, Fuels Market Slump | Tech News (HT Tech) > Celsius Network Ltd. paused withdrawals, swaps and transfers after weeks of speculation over the sustainability of the outsized returns being offered by the DeFi lending platform, fueling a broad cryptocurrency selloff. # Crypto Lender Celsius Stops Withdrawals, Fuels Market Slump ## Celsius Network Ltd. paused withdrawals, swaps and transfers after weeks of speculation over the sustainability of the outsized returns being offered by the DeFi lending platform, fueling a broad cryptocurrency selloff. Jun 13 2022, 18:09 IST ![Follow on Facebook](https://images.hindustantimes.com/tech/static/revamp/images/png/follow-us-facebook.png) ![Follow on Facebook](https://images.hindustantimes.com/tech/static/revamp/images/png/follow-us-facebook-hover.png) ![Share](https://images.hindustantimes.com/tech/static/revamp/images/png/Share.png) ![Share](https://images.hindustantimes.com/tech/static/revamp/images/png/Shareclicked.png) ![Share on WhatsApp](https://images.hindustantimes.com/tech/static/revamp/images/png/whatsapp.png) ![Share on WhatsApp](https://images.hindustantimes.com/tech/static/revamp/images/png/whatsapp-hover.png) ![Share on Twitter](https://images.hindustantimes.com/tech/static/revamp/images/png/twitter.png) ![Share on Twitter](https://images.hindustantimes.com/tech/static/revamp/images/png/twitter-hover.png) ![Share on Facebook](https://images.hindustantimes.com/tech/static/revamp/images/png/facebook.png) ![Share on Facebook](https://images.hindustantimes.com/tech/static/revamp/images/png/facebook-hover.png) ![Bookmark](https://images.hindustantimes.com/tech/static/revamp/images/png/Bookmark.png) ![Bookmarked](https://images.hindustantimes.com/tech/static/revamp/images/png/Bookmarked.png) ![Crypto](https://images.hindustantimes.com/tech/img/2022/06/13/1600x900/CRYPTO-CURRENCY-0_1655121308777_1655121322008.JPG) Crypto markets tumbled after the Celsius announcement, with Bitcoin dropping as much as 14% to the lowest level since December 2020. (REUTERS) ![Author Photo](https://images.hindustantimes.com/tech/static/revamp/images/png/HTTech-new-circle-logo.png) ### By BLOOMBERG Celsius Network Ltd. paused withdrawals, swaps and transfers after weeks of speculation over the sustainability of the outsized returns being offered by the DeFi lending platform, fueling a broad cryptocurrency selloff. Crypto markets tumbled after the Celsius announcement, with Bitcoin dropping as much as 14% to the lowest level since December 2020 and other major tokens like Ether also falling sharply. Celsius’s CEL token was down about 50% to 19 cents as of 7:16 a.m. in New York Kong, according to pricing data site CoinGecko. The meltdown is the latest blow to DeFi, or decentralized finance, crypto’s answer to traditional finance, with more control and less costs for users but also less oversight and more risk. Also read click here. Doubts about the sky-high yields backing products such as those Celsius offers have intensified after the collapse of the Terra ecosystem in May, and as tighter monetary policy across the world curbs demand for riskier assets. The CEL token promises “actual financial rewards,” including as much as 30% extra returns weekly, according to its website. While the collapse of the TerraUSD (UST) stablecoin captured most of the market’s attention, one of the project’s main attractions for investors had been its promised interest rate, set as high as 20% for UST deposits in the Terra blockchain-based lending project Anchor. Celsius was an investor in the project. Both revolve around the promise of super-high yields to keep up demand, which itself depended on a steady flow of new entrants feeding the system, or borrowing to pay the high rates. Nexo, a London-based competitor, announced on Twitter that it’s ready to buy any “remaining qualifying assets” of Celsius, which it defined as “mainly their collateralized loan portfolio.” Nexo later published a letter of intent outlining the offer on Twitter. A Nexo spokeswoman confirmed the tweets. Nexo also said it had reached out to Celsius to offer support, “but our help was refused.” The firm has a “strong liquidity and equity position,” a spokeswoman said by email without giving details. Celsius didn’t immediately respond to requests for comment on Nexo’s statement. A little over a day before announcing the halt, Celsius Chief Executive Officer Alex Mashinsky appeared to counter speculation about a freeze on withdrawals, tweeting “Mike do you even know one person who has a problem withdrawing from Celsius?” in response to a post by Mike Dudas, a crypto investor and co-founder of The Block. In announcing the move, Celsius said: “We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.” It added that users will continue to accrue rewards during the pause. The announcement landed in the midst of turmoil in crypto markets, with worse-than-expected US inflation data on Friday stoking expectations of faster interest rate increases, hitting riskier assets like digital tokens. Bitcoin has tumbled 47% this year, while Ether has lost about two-thirds of its value. There’s No Hiding From the Bad News This Time: John Authers “The Celsius news added fuel to the fire, adding to the uncertainty in the market,” said Vijay Ayyar, vice president of corporate development and international at crypto platform Luno. “There is a lot of pressure on prices as we go into the week of Fed decision coupled with concerns on the protocols offering high-yield products.” Tokens linked to lending and borrowing protocols underperformed on Monday, with their overall value down 10% compared with a 6.4% drop in the broader crypto universe, according to CoinGecko. Celsius peers Aave, Maple and Compound slumped 12%, 15% and 13%, respectively. Ethereum blockchain data shows that the largest single digital wallet holding CEL tokens is a wallet that belongs to Celsius itself, with more than 184 million CEL tokens, or 26.6% of the total supply in circulation. Mashinsky clarified in a weekend tweet that Celsius hadn’t been selling the token. The collapse of the TerraUSD stablecoin and its sister token Luna in early May spawned widespread skepticism of the juicy returns crypto lenders like Celsius and decentralized-finance platforms have been promising investors. Anchor, a project linked to the Terra ecosystem, had offered yields of roughly 20% before TerraUSD, or UST, crashed. “The plunge of Celsius’s token $CEL seems to be a realization of the contagion risk of UST/LUNA into similar financial tools,” said Burak Tamac, senior analyst for regulatory and on-chain at CryptoQuant. Catch all the Latest Tech News, Mobile News, Laptop News, Gaming news, Wearables News , How To News, also keep up with us on Whatsapp channel,Twitter, Facebook, Google News, and Instagram. 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