These are chaotic times in cryptoland. Prices are falling sharply and that is causing problems for a number of platforms, including crypto lending platform Celsius. Recent data shows that this platform has sent hundreds of millions of dollars in wrapped bitcoin (wBTC) and ethereum (ETH) to crypto exchange FTX. In addition, Celsius announced that customers will be unable to withdraw their crypto from the platform indefinitely. What is going on here?
Celsius stops crypto withdrawals from customers
Starting with the crypto news that Celsius has ceased withdrawals from the platform. In a tweet the platform writes the following:
“Celsius Network will pause all withdrawals, swaps and transfers between accounts. Acting in the best interests of our community is our top priority. Our activities continue and we will continue to share information with the community.”
The reason for this sweeping action is the “extreme market conditions” and to “put Celsius in a better position to meet its withdrawal obligations.”
Large amount of bitcoin and ethereum to FTX
The above news becomes even more striking in combination with transactions that Celsius has sent to FTX† Among other things, it would have 9,500 wBTC worth about $250 million Hospitalized from decentralized finance (DeFi) platform Aave and then sent it to FTX. It did the same with nearly $75 million worth of ethereum.
Instead of the aforementioned crypto, Celsius has now pegged $222 million worth of stablecoins on Aave since Sunday. So it seems that it has amassed more stablecoins to ensure the liquidity of the platform. In a situation where Celsius users wanted to take up stablecoins en masse, Celsius would not have been able to handle that initially, it seems.
Celsius rate 52% in the red
In short, it appears that Celsius is working to improve its position to meet its withdrawal obligations, as it stated in the announcement. Nevertheless, the huge transactions, without any information from Celsius itself, are worrying for the community.
The price of Celsius (CEL), the crypto of the lending platform, is down as much as 52% over the past 24 hours due to recent news and general market conditions.