On Monday, June 13, 2022, the crypto economy fell below the $1 trillion mark as the vast majority of crypto assets lost between 10% and 25% in the last 24 hours. Meanwhile, the crypto community is discussing the Celsius cryptocurrency lending app as rumors of insolvency circulate. On June 12 at around 10:10 pm ET, Celsius announced that it had suspended “all withdrawals, exchanges and transfers between accounts.”
Celsius Suspends Lending App, Crypto Community Speaks Possible Insolvency and Liquidation
On Sunday evening, lending company Celsius posted a tweet detailing specific operations on the platform that had been suspended. “Due to extreme market conditions today, we are announcing that Celsius is suspending withdrawals, swaps and transfers between accounts,” Celsius said. disclosed.
“Today, we are taking these actions to help Celsius meet its withdrawal obligations over time,” Celsius added. The firm also released a blog post explaining that Celsius was taking steps to remedy the situation.
“We are taking these necessary actions for the benefit of our entire community to stabilize liquidity and operations while taking steps to preserve and protect assets,” Celsius said in a statement. Blog post notes. “In addition, clients will continue to receive rewards during the pause, in line with our commitment to our clients.”
There are rumors that Celsius may be insolvent, and speculation about the company’s money problems began long before the company went on hiatus. Former CEO of The Block Crypto news outlet Mike Dudas tweeted about the “demise of Celsius” the day before the firm stopped withdrawing funds.
“I am saddened by how many people applaud the passing of [Celsius Network]”, wrote Dudas on Twitter. “I, like many others, advised people not to invest their funds in this risky business. However, many have done so, and a large number of retailers seem to be recovering soon. We are all losing “.
However, the founder and CEO of Celsius, Alexey Mashinskiyseemed to take offense at Dudas’ tweet and responded. “Mike, do you know even one person who has trouble getting out of Celsius?” Mashinskiy asked. “Why spread FUD and disinformation? If you are paid for this, let everyone know that you are choosing sides, otherwise our job is to fight Tradfi together … “
In addition, there is speculation that approximately $500 million of Celsius funds are locked in the Maker leverage protocol. “The Celsius network uses 17,919 WBTC in the Maker protocol,” wrote one Twitter user. wrote. “This position is liquidated at $22,584/$.BTC. DAI debt of $278 million, making it the largest single debt position on the record.”
Adam Back from Blockstream answered to a tweet and said “I guess it’s defi BTC profitability strategy. Can not [Celsius Network] pull DAI from any yield/staking and then reverse DAI and get WBTC? I hope there will be no temporary blocking in DAI rates,” Baek added.
Estimated Over $1 Billion Stored In Celsius Wallets, Crypto Lender Nexo Offers Acquisition Of Celsius Assets
This was stated by Block Crypto Vice President for Research Larry Cermak. completed the database Celsius wallets and concluded that $1.5 billion was in those accounts. “Please be aware that there may be errors. The list may not be complete and I may have mislabeled some of them over the years of tracking them.” – Cermak added.
Another man added to Cermak’s list and discovered about $1.3 billion in Celsius wallets. In addition to all the rumors and conjectures, a Celsius competitor offered to acquire the company’s assets. Nexo AG sent an open letter to Celsius Network with an official offer.
“After the seeming failure [Celsius Network] and mindful of the implications for their retail investors [and] to the crypto community, Nexo has made an official offer to acquire the respective assets [Celsius Network] after freezing their withdrawal”, Nexo explained with a letter attached to the tweet.
“[We’ve been] having run a solid business for 4+ years, based on solid fundamentals and prudent risk management, Nexo is in a strong liquidity and equity position as evidenced by the only real-time attestation of reserves by a blockchain finance company,” reads the statement. company message. added.
The company concluded that obtaining all or part of Celsius’ assets “would go a long way to providing immediate liquidity for [Celsius Network]”. connection said he is still waiting for a response from Celsius Network management regarding the official proposal.
What do you think of the Celsius Network situation? Let us know what you think about it in the comments section below.
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