Bitcoin slides after crypto lender Celsius Network freezes withdrawals

moneycontrol.com:

Bitcoin tumbled on Monday after major U.S. cryptocurrency lending company Celsius Network froze withdrawals and transfers citing "extreme" conditions, in the latest sign of how financial market turbulence is causing distress in the cryptosphere.

The Celsius move triggered a slide across cryptocurrencies, with their value dropping below $1 trillion on Monday for the first time since January last year, dragged down by 11% fall in the largest token bitcoin.

After Celsius's announcement, Bitcoin touched an 18-month low of $23,476. No.2 token ether dropped as much as 16% to $1,177, its lowest since January 2021.

Crypto markets have dived in the past few weeks as rising interest rates and surging inflation hurt riskier assets across financial markets. The collapse in May of the terraUSD and luna tokens also shook the industry.

"It's still an uncomfortable moment, and there's some contagion risk around crypto more broadly," said Joseph Edwards, head of financial strategy at fund management firm Solrise Finance.

Celsius offers interest-bearing products to customers who deposit cryptocurrencies at its platform, and then lends out cryptocurrencies to earn a return.

In a blog post, the company said it had frozen withdrawals, as well as transfers between accounts, "to stabilise liquidity and operations while we take steps to preserve and protect assets."

"We are taking this action today to put Celsius in a better position to honour, over time, its withdrawal obligations," the New Jersey-based company said.

The surge of interest in crypto lending led to concerns from regulators, especially in the United States, who are worried about investor protections and systemic risks from unregulated lending products.

Celsius and crypto firms that offer