UK Edition
Binance, the world’s biggest cryptocurrency exchange, has “paused” Bitcoin withdrawals amid a major market downturn.
The “temporary” suspension came after Celsius, the second biggest crypto market, halted all withdrawals in the small hours of morning following what bosses described as “extreme market conditions”.
Celsius, a cryptocurrency lender that works rather like a bank, said: “We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations.”
Meanwhile Binance said its halt on Bitcoin trading was because of a “stuck transaction”, adding that trading in other cryptocurrencies was not affected by the pause.
Celsius also said its 1.7m users would continue to accrue rewards while their accounts were frozen.
Crypto markets slumped after the announcement, with Bitcoin dropping to its lowest level since December 2020 at around $20,300.
Ether, the world's second-largest cryptocurrency, dropped more than 8pc to $1,303, its lowest since March 2021.
Celsius’s own CEL token was down 73pc overnight to $0.19, according to cryptocurrency price data site CoinGecko. Data from April suggested the token was worth around $3 at that time.
Celsius’s size exposes it to a large portion of the crypto markets, with the lender having taken out a $500m loan from Tether last year. Tether is a so-called stablecoin whose value is pegged to that of a real-world currency, the dollar. Tether’s value was broadly flat this morning, having declined from $0.999 to $0.998.
On May 17, Celsius had processed $8.2bn worth of loans and had $11.8bn in assets, according to its website. Celsius said in August last year that it had more than $20bn in assets, Reuters reported.
The lender works like a traditional bank by accepting user deposits, paying interest on them and making loans in cryptocurrencies.
An advert on its website this morning promised 18pc returns on investment, spread through a variety of token trading instruments.
In May the Terra cryptocurrency crashed amid what was described as a Black Wednesday for digital token markets.
A stablecoin similar to Tether, the Terra crash rocked cryptocurrency markets after a hitherto unnoticed flaw in its model led to a slump in the value of a related token dragging Terra down with it.