London, Jun 13 (IANS): Crypto lending platform Celsius announced on Monday that it is pausing all withdrawals citing "extreme market conditions", media reports said.
The controversial company -- which has lent out more than $8 billion and managed nearly $12 billion in assets as of May -- has not announced a timeline for when the withdrawals will resume.
"Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts," the firm wrote in a memo to clients, Daily Beast reported.
Some are now concerned about the solvency of the company, which made a name for itself by offering above-average interest rates on deposits.
Its assets have more than halved in value since October 2021, when it controlled $26 billion of clients' funds, and the value of its flagship cel token has also tumbled 97 per cent in the same time. Bitcoin and other cryptocurrencies plummeted after Celsius' announcement was made public.
The world's top cryptocurrency, Bitcoin, slid below $25,000 per token on Monday morning, plunging more than 43 per cent so far this year from nearly $49,000 in March, RT reported.
Bitcoin has been declining for nearly 12 straight weeks now, dragging smaller crypto tokens down with it.
Ethereum, the second largest cryptocurrency, lost nearly 8 per cent of its price, trading around $1,340, a 15-month low. Dogecoin, Stellar, Uniswap, XRP, Solana, Polkadot, Polygon, Cardano, and Litecoin were also down, losing up to 15 per cent over the last 24 hours, RT reported.
Overall, global cryptocurrency market capitalization fell more than 8 per cent in 24 hours, to around $1.08 trillion. Consequently, crypto lending firm Celsius was forced to pause withdrawals and transfers, citing "extreme market conditions."
The price of Celsius' own token also dropped on the news, plunging 45 per cent to $0.21 per coin, RT reported.
Crypto analysts say the prices are suffering from the unstable macroeconomic environment, as people are not eager to take risks while inflation in the US and other countries is soaring. However, some experts predict that the global adoption of Bitcoin will grow when the geopolitical situation stabilizes.