- Celsius halted withdrawals on Monday, noting that said the process back to normalcy could see delays
- Fellow crypto lending Nexo tabled an offer to ‘bail’ Celsius by taking up its qualifying assets
Crypto lending platform Celsius is seeing the worst of the crypto markets and, in effect, announced on Monday morning that it paused redemptions citing severe “market conditions.” In what it termed a very important message to the community, Celsius justified that it took the decision in order to remain ‘fit’ to honor its withdrawal obligations to customers over time.
“Acting in the interest of our community is our top priority. In service of that commitment and to adhere to our risk management framework, we have activated a clause in our Terms of Use that will allow for this process to take place. Celsius has valuable assets and we are working diligently to meet our obligations,” a statement from the lender read.
Trying to calm the customer, Celsius added that even with the halt, users would continually accrue rewards, adding that the decision was taken to steady its position in this bear market space.
The markets aren’t looking kind, with the lead digital asset Bitcoin retailing at $22,962.5, down 16.45% in the last 24 hours. The total market capital of the crypto markets has fallen below the $1 billion mark to $962 million at writing.
While it did not specify a date, Celsius said it was working to stabilise liquidity and restore “withdrawals, Swap and transfers between accounts” as fast as possible. The firm added that with a lot to be done, the journey back to sanity could be arduous and possibly see delays.
Nexo offers a helping hand
In the face of troubles, rival lending platform Nexo disclosed via tweet that it officially offered to relieve Celsius of its qualifying assets, claiming to be in an excellent position to do so.
“Nexo is in а solid liquidity and equity position to readily acquire any remaining qualifying assets of Celsius, mainly their collateralized loan portfolio. We are putting together an offer to Celsius to that accord and will communicate it publicly,” a tweet from the team read.
The letter sent to Celsius also explained that even with the currently strenuous market, its operation on a sustainable risk business model with prudent risk management structures allows it to retain financial stability. It also mentioned that its proposal specifically targets the collateralised loan portfolio.
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