New York, June 13 (BUS): The price of Bitcoin and other cryptocurrencies was collapsing on Monday, after a major cryptocurrency lender halted all withdrawals citing “harsh market conditions.”
This is the second collapse of a segment of the cryptocurrency world in the past two months, according to AP reports.
The stablecoin Terra exploded in early May, erasing tens of billions of dollars in a matter of hours.
Bitcoin was trading at nearly $22,600 as of midday Monday, down more than 17% in the past day. Ethereum, another widely used cryptocurrency, is down more than 20%.
On Sunday, lending platform Celsius announced that it will pause all withdrawals and transfers between accounts in order to “fulfill our withdrawal obligations over time.” Celsius, with nearly 1.7 million customers, has given no indication in its announcement when it will allow users to access their funds.
“There is a lot of work ahead because we are looking at different options, and this process will take some time, and there may be delays,” she said.
Celsius is one of the largest cryptocurrency lending platforms, with over $11 billion in client assets. In return for customer deposits, the company offers very generous returns of up to 19% on some accounts.
These lending platforms have come under scrutiny recently because they offer returns that normal markets can’t support, and critics have effectively dubbed them Ponzi schemes.
Terra and its symbol Luna offered similar returns on customer deposits. These tokens collapsed after massive customer withdrawals forced Terra operators to liquidate all assets used to back their coins.
(b) Terra’s collapse has sparked calls for reform from the cryptocurrency industry, and calls for congressional regulation.
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