Bitcoin withdrawals temporarily suspended amid volatile day for crypto market

6/13/2022, 05:05 PM
Bitcoin withdrawals temporarily suspended amid volatile day for crypto market
The cryptocurrency market has endured another day of volatility as the Binance exchange temporarily suspended bitcoin withdrawals and the total value of the digital asset market dipped below $1tn (£820bn), after a cryptocurrency lender stopped customers from taking back their funds.
The cryptocurrency lending platform Celsius Network halted withdrawals because of “extreme market conditions”, prompting a sell-off. Bitcoin dropped to a 17-month low of $23,629 after the Celsius announcement, while ether, the world’s second-largest cryptocurrency after bitcoin, dropped more than 15% to $1,237, its lowest since January 2021. Meanwhile Binance, the cryptocurrency exchange, announced that it had “temporarily paused” bitcoin withdrawals owing to a “stuck on-chain transaction”, before announcing a resumption several hours later.
The total value of the cryptocurrency market fell below $1tn after the sell-off, according to the data site CoinMarketCap, which had valued the market at almost $3tn in November.
Crypto has crashed – can it bounce back?Read moreCelsius said in a blogpost it was “pausing” all withdrawals and transfers between accounts for its 1.7 million customers. The company offers customers high interest rates – as much as 18% – on their cryptocurrency deposits and pays the interest in crypto assets, which includes its own token, called CEL.
“Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, swap, and transfers between accounts,” the platform said. “We are taking this action today to put Celsius in a better position to honour, over time, its withdrawal obligations.” Binance said in a statement that bitcoin withdrawals had been suspended shortly after midday in the UK “due to an earlier batch of transactions getting stuck from low transaction fees submitted”. As a consequence there had been a backlog of bitcoin network withdrawals, Binance said. It then announced at 4.30pm BST that withdrawals had resumed.
On 7 June, Celsius had published a blog seeking to reassure customers amid volatile conditions in the cryptocurrency markets, triggered initially by a collapse in the crypto project Terra.
Headlined “Damn the torpedoes, full speed ahead”, the blog said the company had not had “any issues meeting withdrawal requests”. Celsius has offices in London, New York and Lithuania.
Celsius’s website tells customers they can “borrow like a billionaire”. It has $11.8bn in assets, down from more than $24bn in December last year. In November, it said it had raised $750m from investors including Caisse de dépôt et placement du Québec, one of Canada’s largest pension funds.
Like a bank, Celsius also has a retail loan operation, with customers able to borrow money, denominated in US dollars, from the service. Because of the impossibility of sending debt collectors after a crypto wallet, however, Celsius loans are “overcollateralised”: customers need to deposit bitcoin or ethereum worth at least twice the value of the money