The leading crypto exchange platform in the world, Binance, announced the temporary suspension of withdrawal services for BTC. In a tweet by Binance CEO Changpeng Zhao (CZ), the issue is caused by a transaction backlog due to a system glitch.
However, the issue was initially expected to be fixed in less than 30 minutes, but it turned out to take longer than usual. Meanwhile, the halt in Bitcoin withdrawals came in the wake of the Celsius announcement.
Celsius is a leading digital token lender that earlier halted all withdrawals in what is termed as an “extreme market condition” by the company. Celsius further added that it is taking the necessary action to safeguard users’ funds.
Binance Halts Only Bitcoin Transactions
According to the largest crypto exchange, suspending Bitcoin withdrawals is necessary due to what it calls a “struck transaction.” However, transactions involving other cryptocurrencies are not affected by the sudden pause
CZ further explained that the funds belonged to the Secure Asset Fund for Users (SAFU), which Binance established four years ago. In addition, the CEO reiterated that only the Bitcoin network is affected, but on other exchanges, Bitcoin is available for withdrawal.
Meanwhile, Celcous announced that all its 1.7 million Bitcoin holders will accrue interest while their accounts remain frozen pending when the issue is resolved.
The broader crypto market reacted negatively to the news, with Bitcoin’s price down to its lowest at $20,300 since December 2020.
In terms of adverse price action, second to Bitcoin is Ethereum. The second-largest cryptocurrency shed over 8% to trade at $1,303. This is Ethereum’s lowest trading level since March last year.
Similarly, as per data from CoinGecko, Celsius’ native token, CEL, dropped 73% to trade at $0.29. Moreover, market data from April shows that CEL’s worth was roughly $3 during that period.
The Big Token Lender
Celsius is the largest crypto lending platform in the industry, with its massive portfolio making it a viable lender. Celsius is reported to have secured a $500 million loan from Tether the previous year. In addition, Tether is the dollar-pegged stablecoin and the largest among others like USDD, USDN, Terra UST, and others.
Meanwhile, the value of Tether has been down, which is a spillover effect of the broader crypto market rout triggered by the collapse of the Terra network.
According to a Reuters report, Celsius has over $20 billion in assets as of August 2021. Last month, the firm processed $8.2 billion in loans with $11.8 billion in assets.
It is worth noting that Celsius functions like a typical traditional bank, using users’ deposits, paying interest, and making loans available in digital assets. It offers several investment packages issued using numerous tokens as an instrument of trade.
The past few days have not been rosy for the crypto industry, and the current situation is much less different. As the digital asset space continues to have a challenging ride, it is still unknown when the market correction will be over.