For more than a week, Celsius, one of the largest centralized crypto services platforms, has been threatened with bankruptcy. Nearly 1.7 million users can no longer touch the money they had deposited on the platform.
Celsius services still not restored
Celsius finally broke the silence. On Monday, the platform announced to its users that they could no longer withdraw or transfer their funds. The decision rocked the cryptocurrency market, which was already in dire conditions amid a gloomy economic backdrop, sending bitcoin plummeting to $20,000.
While many users with blocked accounts are waiting, the company has just updated the question/answer on its blog in the current situation.
The company’s publication is not very reassuring: at the moment, its users still do not have access to their assets, although the company explains that it is working 24/7 to resolve the situation. .
There is nothing reassuring about user funds that are in deposit accounts and are still frozen. “We have stopped withdrawals to allow time to stabilize liquidity and operations,” the company said.
As she already clarified on Monday, even during the break, her clients will continue to accrue rewards after depositing cryptocurrencies on the platform.
“In order to stabilize our liquidity and operations while taking steps to protect customer assets, we believe it is in the best interest of our community and our customers that Celsius pause withdrawals, trades and transactions. transfers between accounts. We have taken this step to put Celsius in a better position to meet its withdrawal obligations over time,” Celsius said.
For the moment, no date for the resumption of these services has been announced by the company, which believes that “there is a lot of work to be done to examine the different solutions, this process will take time, and there may be delays “.
Celsius: the platform that is not supposed to expose its customers
Celsius is one of the largest centralized platforms in the ecosystem. It provides simplified access to decentralized financial services (DeFi) such as borrowing (lending), lending (loaning) and saving (earnings) in cryptocurrencies.
Celsius quickly positioned itself as a giant in the field. And for good reason, the platform offers attractive returns of up to almost 19% APY. As a result, in just a few years, the platform has raised $864 million, reached $3 billion in assets under management, and has over a million customers.
Specifically, Celsius is an asset management company. The platform offers regulated cryptocurrency lending, borrowing, and returns while being remunerated. Users are interested in profiting from this without exposing themselves to the inconveniences and risks of managing DeFi positions themselves.
In other words, Celsius does not offer its clients direct exposure to the underlying asset, but rather promises to take a position in case a user wishes to withdraw funds. This is a fundamental aspect to bear in mind in order to understand the outcome of this case.
Celsius has a close relationship with the Terra blockchain. The platform pumped $500 million into Anchor, one of Terra’s three main protocols, to keep the stablecoin above water, to no avail.
If the current future of Celsius is uncertain, other exchanges could find themselves in the same situation. This is the case of Coinbase, which revealed its intention to lay off 1,100 employees, or 18% of its workforce, due to the market recession.
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Crypto: Celsius finally breaks its silence
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