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Crypto Lending Platform Celsius pauses all transfers, and withdrawals as Markets Tumble
Crypto lending platform, Celsius has paused all transfers, and withdrawals. All withdrawals and transfers from Celsius’s platform have been halted. This means that if you had crypto in there and wanted to get it out, you wouldn’t be able to. In other words, your money is stuck in there. Many people have crypto invested in other platforms comparable to Celsius; fortunately, they have not been affected by this problem (YET), and we will explain why.
Why has Celsius put a halt to all withdrawals?
Well the exact reasons are not known. However, we can still take a guess of what might have happened.
It’s because, like UST, Staked Ethereum, a different token called StETH, used to be pegged to Ethereum (ETH). What has happened now is that StETH or Staked Ethereum has lost value and is now de-pegged from Ethereum or ETH, which means that if everyone wanted to withdraw their tokens, they would not be able to do so.
Another reason is that Celsius, as a loan platform that uses stablecoins, including UST, saw the effects of the Terra ecosystem’s collapse.
CEL token’s price dropped to $0.22, down more than 50% in the last 24 hours.
Where does Celsius stand?
Celsius has tweeted, as you can see in the image above regarding the freezing of any type of withdrawal or transfers. All withdrawals, swaps, and transfers between wallets have been halted by Celsius Network. According to them their first aim is to act in the best interests of their users. Their functions will continue. By this, they mean that they are taking this necessary move for the good of their entire community in order to sustain liquidity and operations while preserving and protecting assets. Furthermore, while the time spent waiting in line, their clients will continue to earn rewards.
In February, 2022, CELSIUS started their HOLD campaign, where the users once activates HOLD mode, will not be able to withdraw their funds unless HODL mode is deactivated. Once there is a change in the HOLD mode, there will be a wait period of 24 hours. Looking back, I think this was just to buy time for CELSIUS platform users.
Did they lose any money to hackers in the past?
A hack on the high – yielding technology BadgerDao in the past resulted in a loss of $115 million in virtual currencies. Further info from on-chain data has indicated that the attack cost Celsius Network $54 million in Bitcoin. From a MetaMask wallet used by Celsius Network to communicate with the BadgerDao website, hackers extracted 896 Wrapped BTC.
What can you do if your money is stuck?
If your money is locked there, you should check for updates on withdrawals on a daily basis because they may be re-enabling withdrawals.
Our guess: It’s not that they don’t want to pay you the money; they just want to wait for Staked Ethereum (StETH) to regain its value and be pegged to Ethereum once more (ETH).
However, this is just an assumption. Celsius may never let you withdraw your crypto, if they are bankrupt.
Sad part is, you can’t do anything about it.
What you can do now is to set an alarm in trading view or any other website you use for crypto alarms, and as soon as that two re-peg or reach a decent standard, you should check the platform to see if withdrawals have been re-enabled so you can get your money back.
Or, just keep checking their social handle, on regular basis.
Unfortunately, many individuals have lost faith in Celsius. We’ve seen a number of crypto projects and protocols go through this, and after losing people’s faith, they’re no longer viable.
What are CELSIUS users saying?
One of the users posted on Reddit, a Social Media website and urged other users to calm down. He said, the current situation with CELSIUS is because of not having enough liquidity to meet withdrawal requests, as the assets are already loaned to institutions and individuals.
Because of high redemption rate in the last week, CELSIUS is not able to afford giving the crypto back to the users. The situation might improve in future and they may again resume withdrawals.
While one of the Redditor commented that he holds around 3.6 BTC and 36ETH on Celsius, and is trying not to stress.
This is a significant amount for many. Another users commented that he has a good chunk of crypto locked with Celsius, though not all of his funds are locked there. He is hopeful that Celsius as a platform will resume withdrawals in near future. We are hoping for the same too.
Lesson To Learn from The Celsius Stopping WithDrawal Saga
Not your keys, not your coins.
I think it is better to keep your crypto off these crypto lending platforms for small interest. It is definitely not worth the risk. If a project that raised more than 700M could stop withdrawal, any project could do that with your funds.
Hence, better to keep your crypto in a private crypto wallet than risking all your funds in lending platforms like this.
Disclaimer: We have funds locked in CELSIUS too.