Bitcoin Plunges As Crypto Lender Stops Operations
On Monday, June 13, 2022, the price of bitcoin and other cryptocurrencies plummeted after a major cryptocurrency lender effectively failed and halted all withdrawals from its platform, citing "severe market conditions," Ken Sweet reported for the Associated Press (AP).
Photo Insert: Bitcoin was selling at around $23,400 on Monday afternoon, down almost 16% from the previous day.
It's the most recent high-profile failure of a bitcoin industry pillar. These collapses have wiped out tens of billions of dollars in investor assets, prompting urgent calls for regulation of the unregulated business.
Bitcoin was selling at around $23,400 on Monday afternoon, down almost 16% from the previous day. Another highly followed cryptocurrency, Ethereum, was down more than 20%.
Celsius Network, a cryptocurrency lending platform with roughly 1.7 million customers and more than $10 billion in assets, announced on Sunday that it was halting all withdrawals and transfers between accounts in order to "honor, over time, withdrawal obligations." Celsius gave no indication when users would be able to access their funds.
With over $11 billion in customer assets, Celsius is one of the larger bitcoin lending companies.
The organization pays out exceptionally generous rates in exchange for consumers' deposits, up to 19 percent on some accounts. Celsius invests in those funds and lends them out to earn money.
Lending platforms like Celsius have recently come under fire from critics who claim they are effectively Ponzi schemes because they provide returns that conventional markets cannot maintain.
It's the cryptocurrency world's second major fall in less than two months. In early May, the stablecoin Terra crumbled, wiping out tens of billions of dollars in a matter of hours. Because they're meant to be backed by hard assets like gold, stablecoins have been thought to be reasonably safe.