Celsius Withdrawal Show shows run risks at other crypto banks

Celsius Withdrawal Show shows run risks at other crypto banks

While cryptocurrencies and associated stocks continue to fall, industry participants wonder how the collapse of the crypto-lending platform Celsius could affect the markets for digital assets.

"We were certainly able to determine an infection," said Rashed Saleuddin, research manager at Blockworks. "Transparency is the key to shadow bank markets."

Celsius, which is sometimes referred to as a quasi-bank because it crosses the border between decentralized and centralized financing, said on Sunday that she would interrupt, exchange processes and transfers between accounts on her platform due to "extreme market conditions".

"We take this measure today, in order to better enable Celsius to comply with his retreat commitments over time," wrote the company in a Blog entry .

The company said that it was essential to "stabilize liquidity and operation".

On Monday morning, the Krypto exchange Binance paused the Bitcoin withdrawals for about three hours, as the markets continued to crash from Celsius. According to A, Binance attributed the suspension to "minor hardware errors", which led to a deficit in transactions Twitter .

"We have seen many transactions and are by no means as big as Binance," said Chris Kline, Chief Operating Officer and co -founder of Bitcoin Ira. "We have a few billion dollars - they almost got a trillion, but they can imagine what happens, the technology is really pushed to its limits, and it is a stress test for your system."

runs can burden any financial system, added KLINE.

"Just like if this would happen with shares, there would be houses such as Fidelity, TD Ameritrade, etc., who had problems with too many people in the system," said Kline. "Too many people who do something cause residues."

What happens to Celsius and what happened to Terra's VAT in May are runs, said Saleuddin, and it is not foreseeable which other companies could be affected.

"Is Blockfi in danger? Nexo? It depends on how fluent they are," said Saleuddin.

The quasi-bank colleague Tether tried to distance himself in one of Celsius Blog entry Monday.

"Although Tether's investment portfolio contains an investment in the company that makes up a minimal part of our equity, there is no correlation between this investment and our own reserves or stability," said the credit platform.

Since the disclosures are vague, it is impossible to know exactly how risky Tether's assets are, said Saleuddin.

"But we know that they are trading, precious metals and a decent amount of inferior trading papers and exposed to Celsius," said Saleuddin. "What would it need for a run on Tether? The truth is that we don't know."

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The post "Celsius WithDrawal stop reveal runs risks on other crypto banker" is not a financial advice.