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Title: Major crypto lender Celsius freezes withdrawals as markets tumble

Jun 13, 2022 05:30AM ET

By: AnalysisWatch

Celsius Network, a major US cryptocurrency lender, froze withdrawals on Monday due to extreme market conditions, the latest sign of downward pressure on the sector from cryptocurrency markets.

Celsius Network, a significant player in the cryptocurrency lending market, offers interest-bearing products to customers who deposit their cryptocurrencies with the company and lend them to receive a return.

At the end of November, it had received $750 million in funding from investors, including Canada's second-largest retirement fund. At the time, the company was worth USD 3.25 billion.

The increased interest in cryptocurrency lending has raised concerns among regulators, particularly in the United States, who are worried about investor protection and systemic risk.

With rising interest rates and soaring inflation, the cryptocurrency markets, along with equities and other assets on the financial markets, have come under pressure. The collapse in May of the so-called stable coin terraUSD and its sister token, Luna, also sent shockwaves through the cryptocurrency industry.

The largest cryptocurrency, bitcoin, plunged even further after Celsius' announcement, by more than 7.8% to USD 24,502, the lowest level since December 2020.

At the same time, the second largest token, Ether, fell by as much as 12% to USD 1,245, its lowest level since March 2021.

Last year, large investors and venture capital firms bet heavily on the cryptocurrency lending sector.

As of May 17, Celsius Network had $11.8 billion in assets, according to its website, less than half the amount it had in October, and had processed a total of $8.2 billion of loans.

The company's website on Monday offered interest rates of up to 18.6%.

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