Crypto Opinions & News Cryptocurrency Plunges as Crypto “Bank” Celsius Suspends Withdrawals

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upnorth

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Major cryptocurrencies suffered big losses on Monday. As I write this, bitcoin is down 14 percent over the last 24 hours, while ether is down 16 percent. Other major cryptocurrencies—including solana, dogecoin, and litecoin—are also down by double digits, according to CoinMarketCap.

The cryptocurrency crash is part of a broader market sell-off. The S&P 500 stock market index fell almost 4 percent on Monday amid fears of faster interest rate hikes from the Federal Reserve. High interest rates put downward pressure on all assets, including stocks and cryptocurrencies. Another big factor that may have spooked cryptocurrency traders was the Monday announcement by crypto lender Celsius that it was suspending withdrawals. The company said this was the result of "extreme market conditions."
 

upnorth

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An ex-employee of Celsius Network, the cryptocurrency lending platform that recently suspended all transactions, this week accused the company of operating as a Ponzi scheme in a lawsuit.

Netizens were told they could earn interest on cryptocurrencies they put into Celsius. The biz generated that return by investing people's funds in the cryptocurrency market. Celsius needed to make enough money on its trades to produce those interest fees. When the crypto market crashed last month, amid general economic uncertainty, Celsius froze all withdrawals, swaps, and transfers on its network. Now, one of its former asset managers has alleged in a filing to the New York County Supreme Court that this all devolved into nothing more than a grubby, unsustainable Ponzi scheme.
 

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