Crypto Industry Shows Cracks as a Second Firm Limits Withdrawals

Text size

Elements of the crypto industry appear to be seizing up as the currency plummets in value.

Dan Kitwood/Getty Images

Four days after crypto giant


Network abruptly halted withdrawals for customers, other firms in the industry are showing cracks.

A major crypto hedge failed to repay some creditors. And another firm that like Celsius holds crypto deposits said it would cap customer withdrawals.

Still, the biggest shoe to drop so far has been Celsius. As recently as mid-May, Celsius held $11.8 billion worth of crypto assets on its platform with promises to pay alluring yields sometimes exceeding 10% to investors. To earn that yield, the company lent money to institutional investors and in some cases made large investments on “decentralized finance” protocols that paid Celsius even higher rates. But recent pressures in the crypto market—as well as the lack of liquidity in some of Celsius’ investments—apparently lead the company to suspend withdrawals, triggering fears about how long investors’ money might be locked up and whether they might ever get it back.

A Celsius spokesperson referred to a blog post promising customers, “We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.

By Thursday the pain had spread much further. A crypto hedge fund that at one time managed $10 billion called Three Arrows Capital failed to meet margin calls and had positions liquidated. Its CEO Su Zhu this week posted a cryptic tweet, saying “We are in the process of communicating with relevant parties and fully committed to working this out.” That was followed later by an announcement from crypto yield…



Recommended For You

Leave a Reply

Your email address will not be published. Required fields are marked *