Celsius Has Paused All Withdrawals, Swaps, And Transfers Citing Bad Market Conditions – Is It Turning Into Another Terra Luna Disaster?
Weeks after the collapse of Terra, the crypto market is yet to recover from the shock. Now, another ecosystem seems to be struggling and investors are worried that it may be heading the Terra way. The Celsius Network, which created the CEL token, has stopped all transfers, withdrawals, and swaps on its network.
In a post on its blog, the company announced the stoppage of account operations, Paused All Withdrawals, Swaps, And Transfers citing unfavorable market conditions. It also sent out emails to customers. It said that the action was meant to protect its customers’ funds as it finds a way to solve the problem. However, investors will still continue to earn rewards from their investments.
Transferred Thousands Of ETH And BTC – Is This A Rug Pull?
While Celsius has stopped investors from withdrawing or swapping their assets, reports have emerged that the company has been transferring lots of ETH to exchanges like FTX.
According to Wu Blockchain:
“Celsius has transferred about 104,000 ETH to FTX in the past three days, including about 50,000 ETH today, 12,000 ETH yesterday, and 42,000 ETH the day before yesterday. In addition, Celsius also transferred about 9,500 WBTC to FTX today.”
The worth of the above transfers is appx $320,000,000 ($320M).
Apparently, the company has been making the transfers for the last few days. Did they anticipate the crash? In the case of Terra Luna, the company involved, TFL, is said to have transferred funds to secret accounts months before the Terra crash.
This is why Celsius’ transfer of thousands of ETH to FTX doesn’t sit well with a lot of people. Could this be another rug pull just like Luna and UST?
On its part, Celsius claims to be doing everything it can to protect investors and find a way out of the predicament. Time will tell.
“We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets. Furthermore, customers will continue to accrue rewards during the pause in line with our commitment to our customers.”
CEL Is Crashing
Meanwhile, CEL is crashing hard. The token has lost over 53% of its value over the last 24 hours and now trades at around $0.19, down from $0.49 on the previous day. The market cap has also dropped by close to 48%, reaching the lows of $137.8 million. The current price is far from CEL’s ATH of $8.02 merely a year ago on June 3rd, 2021. It now records a 97.5% drawback.
Company Downplayed Terra Effects
Celsius is one of the high-yield tokens in the market, offering as high as 30% returns on investment (ROI). Experts have attributed these kinds of extremely high yields to the collapse of Terra which was offering up to 20%.
However, a few days ago, Celsius downplayed the effects of the high yields, saying that it had re-designed its working procedures to avoid the pitfalls experienced by Terra. Now, it appears that the issues have caught up with it.