Crypto criptome Binance halts withdrawals as Ethereum drops

Crypto criptome Binance halts withdrawals as Ethereum drops

Binance halted withdrawals of digital assets for several hours on Monday after Celsius blocked customers from its platform, citing extreme market conditions while digital assets slumped in price.

In recent weeks, ether and other major coins have wobbled, while inflation has surged and big central banks have signalled they will cut back on the stimulus. The price of bitcoin fell as much as 10.3 per cent to an 18 month low of $20,823. According to Bloomberg data, 56 were reported to be in progress.

The drop came after a decline on signs of strain in the infrastructure underpinning the digital asset market. Binance blamed a stuck transaction for its suspension.

The world's most actively traded criptome has dropped almost 20 per cent since Friday to below $24,000, its lowest level since December 2020, according to the data fromCryptoCompare. The value of the broader market for cryptocurrencies has fallen from a peak of $3.2 tn in November to around $1 tn on Monday.

Users have the ability to lend their token to other projects because of the fact that Celsius is one of the biggest players in the market for digital yield products. In return for lending their token, traders were able to earn annual yields of as much as 17 per cent.

Sentiment towards high-risk projects cooled sharply after the terra and luna token collapsed last month in a matter of days. The value of assets deposited on Celsius's platform sank to less than $12 bn as of May 17 from more than $24 bn in late December.

Since Friday, ether has dropped almost 30 percent, leaving it down two-thirds in dollar terms this year to trade at $1,195, which is considered a proxy for sentiment for digital asset projects that offer investors high yields.

The shares of companies that are focused on cryptocurrencies were ricocheted into by selling on Monday. MicroStrategy, a tech company that invests heavily in the digital currency, lost a quarter of its value in early trade on Wall Street, while Nasdaq-listed Coinbase fell 16 per cent.

In an equity funding round led by Caisse de d p t et placement du Qu bec, Canada's second largest pension fund, and WestCap, the fund set up by former Airbnb and Blackstone executive Laurence Tosi, Celsius raised $400 million last year.

In a statement, CDPQ said it was closely watching the situation in an environment of general market declines stock markets and bonds, for the first time in 50 years investors are reducing their risk in all asset classes.

In the past few weeks, Celsius has been impacted by very difficult markets, more specifically the strong volume of withdrawals by customers. Celsius is taking proactive measures to uphold its obligations to its customers and has honoured its obligation to its customers to date. WestCap did not respond to a request for comment on their investment.

Even as the US regulators indicated they were looking at the industry, that fundraising came even though it came as they said they were looking at it. State authorities in Texas and New Jersey have alleged that Celsius's yield-bearing accounts amount to an unregistered securities offering.

The halt to withdrawals early on Monday was a U-turn after it had spent several days rebutting accusations that customers could not make withdrawals. According to CEL, the group s own coin, known as the CEL, has lost half its value in the past 24 hours, and has been challenged by critics at the weekend to find a person who has a problem withdrawing Celsius, which has offices in the US, UK and Lithuania.