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Celsius Network Pauses all Withdrawals

Cesius Network withdrawals

Crypto staking and lending platform Celsius network has ceased all withdrawals, swaps and transfers between accounts amid what it calls ‘extreme market conditions’.

The news follows rumours that Celsius is facing a liquidity crisis, compounded by the fact that the platform is unstaking $247 million worth of Wrapped Bitcoin (wBTC) from Aave and sending it to the FTX exchange.

So far, 9,500 wBTC tokens, worth about $247 million at the time of writing, have been redeemed from Aave. Following a series of transactions, moving all of those tokens to the FTX exchange.

In addition to pausing withdrawals, the project has been moving massive amounts of not only wBTC, but Ether (ETH) – 54,749, worth about $74.5 million, to be exact – and other crypto assets to FTX.

Since Sunday, Celsius has staked 204 million USD Coin (USDC) stablecoins on Aave. It also has deposited 10 million USDC plus about 8.2 million Dai (DAI) stablecoins to Compound, another DeFi staking and lending platform.

The total 222 million stablecoins re-staked by Celsius is almost equal to the value of wBTC tokens it removed. However, it still does not come close to matching the combined value of WBTC and ETH.

This massive migration of crypto-assets has been touted as a move to stabilise liquidity on the platform. This follows criticism of how the project has mismanaged its funds following the collapse of the Anchor Protocol on the now-named Terra Classic blockchain.

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In a statement addressing the pausing of withdrawals. The company said: “We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.”

“Acting in the interest of our community is our top priority. In service of that commitment and to adhere to our risk management framework, we have activated a clause in our Terms of Use that will allow for this process to take place. Celsius has valuable assets and we are working diligently to meet our obligations.

“We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets. Furthermore, customers will continue to accrue rewards during the pause in line with our commitment to our customers.”

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