Celsius continues to struggle in the background to resurrect its crypto banking operations. This past weekend, Celsius announced it had paused all withdrawals due to an apparent crypto bank run. Of course, this generated panic and frustration from its users that had trusted the operation to generate outsized returns with its lending product along with seamless liquidity when they wanted access to their money.
Celsius has now posted a “Community FAQ” that provides little additional information its users want – when can they access and withdraw their money.
Celsius said they are “working around the clock” as they attempt to “stabilize” their liquidity noting once again they have taken this draconian action to “put Celsius in a better position to honor, over time, its withdrawal obligations.”
Earlier today, WSJ.com provided some insight and anecdotal agony affiliated with the Celsius debacle. The report stated that:
“Celsius placed at least $470 million in an investment that had plunged in value, according to blockchain data and a person familiar with the matter. The terms of the investment product, managed by Lido Finance, prohibit Celsius from quickly removing its assets, adding to the difficulties.”
As well, the report noted that Celsius cannot exchange its staked Ether before the Merge takes place, an event that keeps getting delayed.
Additionally, Celsius is said to have hired Akin Gump Strauss Hauer & Feld to review its options including a “financial restructuring.”
Meanwhile, the entire crypto market has collapsed with aggregate value plunging below $1 trillion. At the end of 2021, crypto markets topped $3 trillion in value. With contagion fear growing and interest rates rising there may be no short term fix on the horizon.