Major US cryptocurrency lending company Celsius Network on Monday froze withdrawals because of "extreme market conditions", in the latest sign of pressure on the sector from tumbling crypto markets.
Celsius Network, a significant player in crypto lending, offers interest-bearing products to customers who deposit their cryptocurrencies with the company, and lends out crypto currencies to earn a return.
It raised $750 million in funding late in November from investors, including Canada's second-largest pension fund. The company was valued at the time at $3.25 billion.
In a blog post, the company said it had frozen withdrawals, as well as transfers between accounts, "to stabilise liquidity and operations while we take steps to preserve and protect assets".
"We are taking this action today to put Celsius in a better position to honour, over time, its withdrawal obligations."
The Celsius move puts the spotlight on the sustainability of crypto lending firms after a period of breakneck growth last year fuelled by low interest rates and booming crypto markets.
The surge of interest in crypto lending led to concerns from regulators, especially in the US, who are worried about investor protections and systemic risks.
Crypto markets have come under pressure alongside stocks and other assets in financial markets amid rising interest rates and surging inflation. The collapse in May of the so-called stablecoin terraUSD and its sister token luna has also shaken the crypto industry.
The largest cryptocurrency, Bitcoin, fell further after Celsius's announcement, dropping more than 7.8 per cent to $24,502, its lowest since December 2020.
Ether, the second largest token, dropped as much as 12 per cent to $1,245, its lowest since March 2021.
Major investors and venture capital firms bet heavily last year on the crypto lending sector.
As of May 17, Celsius Network had $11.8bn in assets, its website said, down by more than half from October, and had processed a total of $8.2bn worth of loans.
Chief executive Alex Mashinsky was quoted in October last year saying Celsius had more than $25bn in assets.
Mr Mashinsky did not immediately respond to a text message seeking comment outside US business hours.
In a tweet on Monday, rival crypto lender Nexo said it had offered unspecified help to Celsius, but was refused. It said it was "putting together an offer" for any assets.
The company's website on Monday was offering interest rates of up to 18.6 per cent.
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THE SPECS
Engine: 1.5-litre, four-cylinder turbo
Transmission: seven-speed dual clutch automatic
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Price: Dh54,500
On sale: now
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COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
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October 18 – 7.30pm, UAE v Oman, Zayed Cricket Stadium, Abu Dhabi
October 19 – 7.30pm, UAE v Ireland, Zayed Cricket Stadium, Abu Dhabi
October 21 – 2.10pm, UAE v Hong Kong, Zayed Cricket Stadium, Abu Dhabi
October 22 – 2.10pm, UAE v Jersey, Zayed Cricket Stadium, Abu Dhabi
October 24 – 10am, UAE v Nigeria, Abu Dhabi Cricket Oval 1
October 27 – 7.30pm, UAE v Canada, Zayed Cricket Stadium, Abu Dhabi
October 29 – 2.10pm, Playoff 1 – A2 v B3; 7.30pm, Playoff 2 – A3 v B2, at Dubai International Stadium.
October 30 – 2.10pm, Playoff 3 – A4 v Loser of Play-off 1; 7.30pm, Playoff 4 – B4 v Loser of Play-off 2 at Dubai International Stadium
November 1 – 2.10pm, Semifinal 1 – B1 v Winner of Play-off 1; 7.30pm, Semifinal 2 – A1 v Winner of Play-off 2 at Dubai International Stadium
November 2 – 2.10pm, Third place Playoff – B1 v Winner of Play-off 1; 7.30pm, Final, at Dubai International Stadium
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Biog
Mr Kandhari is legally authorised to conduct marriages in the gurdwara
He has officiated weddings of Sikhs and people of different faiths from Malaysia, Sri Lanka, Russia, the US and Canada
Father of two sons, grandfather of six
Plays golf once a week
Enjoys trying new holiday destinations with his wife and family
Walks for an hour every morning
Completed a Bachelor of Commerce degree in Loyola College, Chennai, India
2019 is a milestone because he completes 50 years in business
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
