In an email sent to account holders late Sunday evening March 12th, 2022 Crypto lending firm Celsius Network LLC announced it was pausing withdrawals, transfers and swaps. The move comes on the heels of a tightened regulatory environment and has prompted the firms native Celsius token to decline by over 50%.
Here is the email sent from Celsius to its account holders:
What is Celsius?
Celsius is a cryptocurrency platform that offers interest rates as high 18%. The company was valued at $3.25 billion when it extended its “oversubscribed” series B financing round to 750 million dollars in November. Celsius allows its users to deposit their cryptocurrency and receive these payments for an annual yield of up 17% depending on time horizon. Celsius’ website indicates they have 1.7 million who “call Celsius home“.
Celsius is lead by Co-founders Alex Mashinsky and S. Daniel Leon.
Deteriorating Market Conditions And Increasing Regulatory Pressure
Celsius has grappled with high sell offs and increasing regulatory pressure. Techcruch.com reports the company has just $3.8 billion of assets, down from $24 billion it disclosed in December of 2021. In addition, four US states; New Jersey, New York, Kentucky and Texas have issued cease and desist letters or started the regulatory action process (per jdsupra.com).
The price of Celsius’s native token fell dramatically on the news, declining 50% to $0.1881 per coin.
Celsius’s move comes in the broader context of stress in the crypto markets. The total crypto market declined 40 percent since June of 2022 with major bellwether coins like Bitcoin and Ethereum falling 33% and 46% respectively.
James Hendrickson is an internet entrepreneur, blogging junky, hunter and personal finance geek. When he’s not lurking in coffee shops in Portland, Oregon, you’ll find him in the Pacific Northwest’s great outdoors. James has a masters degree in Sociology from the University of Maryland at College Park and a Bachelors degree on Sociology from Earlham College. He loves individual stocks, crypto investing, bonds and precious metals.
