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Crypto markets reel as trading platforms suspend customer withdrawals


Crypto markets plummeted on Monday morning on news of troubles at another popular decentralized finance platform, dropping below $1 trillion in market capitalization for the first time since early 2021.

Celsius Network, a crypto lending business whose promise of eye-popping yields for retail consumers attracted a barrage of scrutiny from regulators, announced late Sunday night that it was halting withdrawals and crypto-for-crypto trading services for more than 2 million customers “due to extreme market conditions.”

With Celsius’s reported $11.8 billion of assets under pressure, the disruption accelerated a selloff in high-risk digital markets that were already reeling amid rising interest rates and a possible recession. Bitcoin, the most widely traded digital asset, has lost more than 17 percent of its value over the last 24 hours and is now trading below $23,000 — roughly a third of where it was valued in late fall.

With prices crashing, Binance — the world’s largest crypto marketplace — announced on Monday it was freezing Bitcoin withdrawals for technical reasons. Those services were resumed about three hours later.

Celsius’ problems are landing only a month after another popular DeFi protocol, TerraForm Labs, sustained tens of billions of dollars in losses following the collapse of its algorithmic stablecoin TerraUSD. Like Celsius, Terraform had attracted interest in its platform by offering token holders high-yield returns in exchange for staking their crypto in an online lending platform.

State and federal market regulators have targeted those business strategies as a potential violation of securities law. BlockFi, a New Jersey-based platform, reached a $100 million settlement with the Securities and Exchange Commission and 32 state agencies after it was accused of selling unlicensed investment products for about three years.

Celsius was hit with cease-and-desist orders by at least four state agencies over its lending platform last year and was reportedly being investigated by the SEC as well. In April, the company announced it would limit U.S. access to yield-generating lending products to accredited investors.

It’s unclear when Celsius will allow customers to withdraw their assets or resume trading. The company did not respond to a request for comment.

Over the weekend, Celsius CEO and Celsius Network CEO Alex Mashinsky had pushed back on an online critic who had tweeted that a “large number of retail folks look like they are soon to be rekt [sic].”

“Do you know even one person who has a problem withdrawing from Celsius?” Mashinsky tweeted.

The company announced it was halting withdrawals the following day.

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