Cryptocurrency lending service Celsius has paused withdrawals on its platform for an unknown time, citing “extreme market conditions”, the company said in a blog post on 13 June.
Celsius said in its announcement that pausing all withdrawals, swaps, and transfers between accounts was necessary “due to extreme market conditions”, and that the move was made “to protect and preserve assets to meet our obligations to customers”. While the company did not provide a timeline for resuming withdrawals, it did say there was a lot of work ahead and that the process could take some time.
In addition to pausing withdrawals for users, the platform — which reportedly had $12 billion in customer assets as of May 2022 — has also moved massive amounts of ETH, wBTC, and other crypto assets, which has spiked speculations in the crypto community. Unsurprisingly, the news did not reflect well on the price of Celsius’ CEL token, which has fallen by 55% in the past 24 hours.
Celsius’ unusual token movements began around 6:00 pm EST on Sunday, when it started removing wBTC — worth around $247 million — from the Aave staking and lending platform, and transferred them to the FTX exchange. Almost 55,000 ETH were also sent to the FTX exchange for unknown reason.
Since Sunday, the platform has also re-staked about 222 million stablecoins on various DeFi staking and lending platforms, with around 204 million USDC going to Aave. While the staked amount is almost equal in value to the withdrawn wBTC tokens, it still does not represent the combined value of wBTC and ETH that were sent to FTX. One explanation could be that the company is trying the replace its more volatile funds, like wBTC and ETH, with stablecoins, which it will use ensure its liquidity is stable.