Bitcoin and other cryptocurrencies were collapsing in price Monday, after a major crypto lender halted all withdrawals citing “extreme market conditions.”
It is the second collapse of a part of the cryptocurrency world in the last two months. The stablecoin Terra imploded in early May, erasing tens of billions of dollars in a matter of hours.
Bitcoin was trading at roughly $22,600 as of midday Monday, down more than 17% in the past day. Ethereum, another widely-followed cryptocurrency, was down more than 20%.
On Sunday, the lending platform Celsius announced that it was pausing all withdrawals and transfers between accounts in order to “honor, over time, withdrawal obligations.” Celsius, with roughly 1.7 million customers, gave no indication in its announcement when it would allow users to access their funds.
“There is a lot of work ahead as we consider various options, this process will take time, and there may be delays,” it said.
Celsius is one of the bigger cryptocurrency lending platforms, with more than $11 billion in customer assets. In exchange for customers’ deposits, the company gives out extremely generous yields, upwards of 19% on some accounts. These lending platforms have come under scrutiny recently because they offer yields that normal markets could not support, and critics have called them effectively Ponzi schemes.
Terra, and its token Luna, offered similar yields on customer deposits. Those tokens collapsed after huge customer withdrawals forced Terra’s operators to liquidate all of the assets being used to support their currencies. The collapse of Terra has spurred calls for reform from the cryptocurrency industry, and calls for Congressional regulation.