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    Gate.io Blog Celsius Network(CEL)Suspends Transactions and Withdrawals, What Happened?
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    Celsius Network(CEL)Suspends Transactions and Withdrawals, What Happened?

    24 June 15:24



    [TL;DR]


    Celsius Network, under its token (CEL), halted all withdrawals and some transactions from its platform on June 13th of 2022, citing crypto market volatility as the main reason for the decision. The platform, based in New York City and fully regulated under the SEC, is one of the biggest crypto lenders and borrowers in the world - currently holding 11.8 billion dollars in crypto assets under management.


    Why this is concerning: First, you have Celsius Network’s misuse of power over its users, given that you can’t simply halt transactions for customers, especially fund withdrawals. The move was deliberate and shows that the organization lacks the capacity to manage extreme downside volatility. Then there’s the lack of liquidity. Celsius Network always took great pride in stating that all its lending/borrowing frameworks are overcollateralized. By shutting down operations for users, it becomes very clear that this was not the case.


    Celsius case gets to Washington: According to an undisclosed government official who spoke to Jennifer Schonberger from Yahoo! Finance, Celsius Network’s halting of services is already being used as an example for the need of intense regulatory frameworks - side-by-side with Terra’s recent LUNA/UST crash. As more American organs roll out crypto policies, the Celsius Network controversy will put plenty of gas in the fire for these federal agencies to move their eyes onto exchanges.


    How to buy CEL: Once you have created a Gate.io account, head over to the Trade section and select Spot Trading. You will be directed to Gate.io’s main trading hub. From the top-left corner, search Celsius or CEL to see what pairs are available to trade from.


    How to store CEL: When assets are purchased in Gate.io, they are immediately provided with state-of-the-art custody which can be accessed through the Wallet menu on the top-right corner. Just head to Funds Overview and select the chosen account that you’d like to view your assets on.


    How to stake CEL: Gate.io offers staking options to thousands of cryptocurrencies, and that includes staking CEL. To stake Celsius, head to the Finance menu on the top toolbar, then click HODL & Earn. From there, click on the Flexible Term category to see what Celsius staking options are currently available.

    Keywords: celsius network suspends transactions, celsius network suspends withdrawals, CEL token, ceo alex mashinsky, regulated by the SEC, crypto policies, biggest crypto lender, crypto market volatility, bipartisan bill, stablecoin policies, how to buy cel, how to store cel, how to stake cel


    [Full Article]


    Celsius Network, under its token (CEL), halted all withdrawals and some transactions from its platform on June 13th of 2022, citing crypto market volatility as the main reason for the decision. The platform, based in New York City and fully regulated under the SEC, is one of the biggest crypto lenders and borrowers in the world - currently holding 11.8 billion dollars in crypto assets under management.


    The withdrawals were interrupted at the end of Sunday night US time when users began reporting that they weren’t able to make use of any services on the platform, such as swapping currencies or activating new staking/loan options. Shortly after, the centralized crypto project made an official statement on Twitter where it called for a pause on all crypto withdrawals, swaps and transfers.


    According to the statement, Celsius is taking this action taking this action “today (Sunday) to put Celsius in a better position to honor, over time, its withdrawal obligations.” Celsius Network’s CEO, Alex Mashinsky, retweeted the organization’s official tweet on the matter but as of now has not come forth to disclose the matter himself. Over the past couple of weeks, Mashinsky was very vocal about Celsius not halting transactions as the company was overcollateralized with its treasury and able to secure all needed transactions, despite rumors that it would not be able to sustain the current bear market.


    With Bitcoin and the entire crypto market dipping as hard as it has, the fear came true but its CEO and co-founder Daniel Leo have not been vocal about the matter.


    Why this is concerning




    The official statement by Celsius Network came in the form of a tweet linking to a Medium page. CEO Alex Mashinsky has yet to publicly address the matter. Source: Twitter


    The main reason as to why this is extremely concerning comes from two main factors.


    First, you have Celsius Network’s misuse of power over its users, given that you can’t simply halt transactions for customers, especially fund withdrawals. We have seen something similar in early 2021 with GameStop stock (GME) being used as a meme amongst popular Reddit communities - which allegedly resulted in Robinhood halting transactions related to GME. Many of these cases are still being processed in court and did not involve any public announcement from Robinhoods’ side so they can be supposedly false. With Celsius Network, however, the move was deliberate and shows that the organization lacks the capacity to manage extreme downside volatility.


    This brings us to the second issue; lack of liquidity. Celsius Network always took great pride in stating that all its lending/borrowing frameworks are overcollateralized so the network (its users) never suffers from any issues that may arise from market sentiment, rise in volatility, project errors and so forth. By shutting down operations for users, it becomes very clear that this was not the case as Celsius undoubtedly suffers from a poor-liquidity issue. It’s easy to presume that regulators were not fond of their recent actions, including some in Washington.


    Celsius case gets to Washington




    MIT and US government advisor Kavita Gupta explains that the controversy has to do with liquidity issues. Source: CoinDesk


    According to an undisclosed government official who spoke to Jennifer Schonberger from Yahoo! Finance, Celsius Network’s halting of services is already being used as an example for the need of intense regulatory frameworks - side-by-side with Terra’s recent LUNA/UST crash.


    Kavita Gupta, founder of an early blockchain fund in the US, believes the problem is the same as most are speculating - lack of liquidity. "When there was a big withdrawal and everyone tried to get their [crypto] out it was like a classic banking problem. It’s just more people trying to take money out than they have liquidity for,” she explained to Yahoo! Finance.


    It’s still early to tell where the issue will take the market, and even more so how long this asset halting will last. There are many questions on the table; will investors get their staking rewards during this period? What about borrowers, will they be fined for not being able to pay out their loans? Better yet, will investors actually get all their assets back?


    One route here is bound to occur; as more American organs roll out bipartisan policies to protect investors in the crypto market, more recently stablecoins, the Celsius Network controversy will put plenty of gas in the fire for these federal agencies to move their eyes onto exchanges.



    How to buy CEL



    Celsius’s native token CEL can be purchased at Gate.io multi-services platform through several ways; from a cash deposit, crypto deposit, credit card and P2P trade.


    Once you have created a Gate.io account, head over to the Trade section and select Spot Trading. You will be directed to Gate.io’s main trading hub. From the top-left corner, search Celsius or CEL to see what pairs are available to trade from - the most popular one being CEL/USDT.


    If your account already has the proper funds to pair with the trade, you are ready to execute your order!


    How to store CEL



    When assets are purchased in Gate.io, they are immediately provided with state-of-the-art custody which can be accessed through the Wallet menu on the top-right corner. Just head to Funds Overview and select the chosen account that you’d like to view your assets on.


    How to stake CEL



    Gate.io offers staking options to thousands of cryptocurrencies, and that includes staking CEL. To stake Celsius, head to the Finance menu on the top toolbar, then click HODL & Earn. From there, click on the Flexible Term category to see what Celsius staking options are currently available - with new opportunities potentially added at any time. The same format applies to any other asset available on the platform. Browse around and see what investment options interest you!







    Author: Gate.io Researcher: Victor Bastos

    * This article represents only the views of the researcher and does not constitute any investment suggestions.

    *Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.

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