Celsius pauses withdrawals: CEL tumbles 51%

The Terra Luna crash Ghost seems to have come back to haunt the Celsius network, a crypto lending platform, as the price of CEL token tumbled by over 51% after Celsius paused withdrawals, transfers, and swaps. Celsius made the announcement early today saying they are focused on protecting and preserving assets.

The news has come as a shock for Celsius users, especially since the majority of crypto investors still have fresh memories of the events that led to the crash of the Terra (LUNA) token. Besides, Celsius also lost a considerable amount of investment following the Terra debacle.

According to Celsius, the pausing of withdrawals, transfers, and swaps was done to:

“Put Celsius in a better position to honor, over time, its withdrawal obligations. In service of that commitment and to adhere to our risk management framework, we have activated a clause in our Terms of Use that will allow for this process to take place.”

Rumors of insolvency

There have been rumors of Celsius insolvency since May that prompted Celsius CEO, Alex Mashinsky, to point the blame to “shadowy Wall Street opportunists.”

Today’s announcement by Celsius however read in part:

“We are working with a singular focus: to protect and preserve assets to meet our obligations to customers.”

Celsius moved $320M worth of crypto to FTX

Before pausing withdrawals, Celsius Network is said to have unstaked about $320 million worth of cryptocurrencies from Aave and transferred them to FTX.

The first batch to be transferred was of 3,500 Wrapped BTC and 50,000 ETH and it began during the weekend.

A further report from on-chain data shows that Celsius has sent more than 100,000 ETH and 9,500 Wrapped BTC to the FTX crypto exchange over the past few days. Other tokens that the staking and lending platform has transferred include MATIC, TUSD, FTT, UNI, and USDP. The overall worth of the total assets transferred is now about $320 million.

Celsius is yet to provide a reason behind moving the assets although speculations are running rampant on social media.

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