Celsius Network halts withdrawals and transfers as crypto winter deepens
13 June 2022
On 13 June, Celsius announced that it’s suspending all withdrawals and transfers indefinitely due to “extreme market conditions” and a need to “stabilise liquidity”, locking their users out of their money.
Mere hours following the announcement, Celsius’ native token, CEL, took a serious nose dive and lost 70% of its value in a single hour. By the next day, CEL was trading at over 40% down. Since then, Celsius is rumored to be insolvent and accelerated the continuing sell-off that plunged the crypto’s total market capitalisation to less than a trillion, a far cry from its all-time high of US$3 trillion last November.
So what triggered the Celsius saga?
Liquidity troubles have been brewing at Celsius Network for about a year now. However, it looks like the particular straw that broke the camel’s back was due to the de-pegging of Lido’s Staked Ether (stETH), a token that represents ETH locked on the Ethereum 2.0 beacon chain and pegged to Ethereum’s ETH.
On DeFi platforms, stETH is often used as collateral to borrow ETH. But since stETH de-pegged twice this month, fears of defaults on DeFi projects like Celsius prompted a wave of redemptions and sparked a liquidity crisis. The unthinkable announcement was then made, much to the horror of its customers.
At the moment, the situation at Celsius is still uncertain but the protocol has hired banking giant Citigroup, law firm Akin Gump Strauss Hauer & Feld and management consultants from Alvarez & Marsal to explore potential financing options.
What is Celsius Network?
Celsius Network is a regulated, SEC-compliant, peer-to-peer (P2P) lending platform that enables users to receive an attractive yield on deposited cryptocurrencies or to take out crypto-collateralised loans. The system is based on the Celsius Network’s native CEL token, which is used to take loans, provide rewards and make payments.
The crypto market has taken a serious nose dive. Digital art trading volume is nowhere close to its record high in January this year. But for the world’s largest gathering of NFT creators and collectors, there’s hardly any evidence of dampened enthusiasm.
Last week, over 15,000 attendees flocked to New York City for the fourth annual NFT.NYC. Packed with mixed panels, pop-up events and gallery showcases, the highly anticipated 3-day industry event proved that NFTs aren’t just about JPEGs but access to real-life events combining the best of Web3 and entertainment.
Among the 1,500 speakers at the conference were Jodee Rich (NFT.NYC co-founder), Devin Finzer (CEO and founder of OpenSea), Zack Yanger (senior vice president at SuperRare Labs) and Hayden Adams (CEO of UniSwap).
Aside from the main events, there were also satellite events and holders-only parties hosted by top NFT projects, including Azuki, Bored Ape Yacht Club (BAYC) and Doodles.
Top crypto hedge fund Three Arrows Capital plunges into liquidation
30 June 2022
The harsh crypto winter has claimed its latest high-profile victim. Singapore-based Three Arrows Capital has formally entered liquidation.
A court in the British Virgin Islands (BVI), where the firm maintains its incorporation, issued the liquidation order on Monday 27 June. This comes shortly after digital asset brokerage Voyager Digital issued a default notice when 3AC failed to make required payments on a loan consisting of US$350 million USDC and 15,250 BTC.
Co-founded in 2012 by former Credit Suisse traders Zhu Su and Kyle Davies, Three Arrows Capital was known for its prescient trading calls, bullish levered bets and for pushing the narrative of a “supercycle”. Based on data from blockchain analytics firm Nansen, the famous hedge fund once held US$10 billion in blockchain assets back in March.
Last month, Three Arrows Capital lost approximately $200 million from the collapse of algorithmic stablecoin TerraUSD and its sister coin, Luna. Along with plummeting prices and sharp sell-off, 3AC’s liquidity woes further intensified, leading to its demise.
Three Arrows Capital has yet to release an official statement in response to the situation.