Lending platform Celsius sends letter to users: Suspends withdrawals, conversions, transfers; Founder goes missing

The lending platform Celsius Network has suddenly announced the suspension of user withdrawals, redemptions, and transfers. At the same time, data firm PeckShield detected that Celsius has transferred approximately 3,500 WBTC tokens, worth around 89 million US dollars, to the FTX exchange. This move undoubtedly further impacts the already declining cryptocurrency market.

Celsius Network Official Announcement:

Due to extreme market conditions, today we announce that Celsius will temporarily suspend withdrawals, conversions, and transfers between all accounts. The purpose of this action is to better fulfill Celsius's obligation to its users.

Putting the interests of our user community first is our top priority. To uphold this commitment and comply with our risk management framework, we have activated a clause in the terms of use to allow for this process to take place. Celsius holds high-value assets, and we are working diligently to fulfill our responsibilities.

For the overall benefit of the community, we are taking necessary actions to stabilize liquidity and operations, while also taking measures to protect assets. Additionally, in line with our commitment to customers, users will continue to receive rewards during this suspension period.

We understand the significance of this announcement, but we believe that the decision to temporarily halt withdrawals, trading, and account transfers at Celsius is the most responsible action we can take at this time to protect the community. The focus at Celsius will include:

“Protecting assets to fulfill Celsius's obligations to users. Our ultimate goal is to stabilize liquidity and resume withdrawals, conversions, and transfers between accounts as soon as possible. There is still much work to be done as Celsius considers various decision options, and this process takes time and may involve delays.”

We appreciate the incredible support of the Celsius community today. It is our privilege to serve you. We are still operational and will continue to share information with the community.

Celsius's Past Incidents

Previously, Celsius Network has been involved in several controversies, including:

• 8/28/2019: Source of interest payments unclear
• 7/6/2020: Misuse of customer assets for liquidity mining
• 8/4/2020: Accused of providing unsecured loans
• 6/25/2021: Allegations of unlimited repeated collateralization of user assets, leading to custody institution suspension
• 5/18/2022: Deposited UST funds, successfully withdrew $500 million before collapse
• 6/7/2022: Lost over 40,000 ETH in the Stakehound private key incident

Data tracking firm PeckShield has pointed out that Celsius has transferred approximately 3,500 WBTC worth around $89 million to the FTX exchange. According to the address, Celsius has transferred a total of 9,500 WBTC on 6/13 and over 100,000 ETH in the past three days.

Founder Alex Mashinsky, in a departure from his usual Twitter battles in response to FUD, only retweeted the Celsius announcement and is currently missing.

Ironically, Alex Mashinsky was still "acting" until the day before. The Block founder Mike Dudas stated on Twitter that he had repeatedly warned against depositing assets into risky businesses like Celsius, but many retail investors still did so, and it looks like these investors are in trouble. Alex Mashinsky replied:

Mike, do you know anyone who has had issues withdrawing from the platform? Why spread FUD and misinformation? If you are paid to do so, let everyone know your position, otherwise our job should be to fight against centralized finance together.

Meanwhile, Celsius's native token CEL has plummeted 95% since the beginning of the year, with a drop of over 70% since June.