Crypto lender Celsius is ‘risking insolvency’ after it pauses withdrawals. The company has received an unsolicited acquisition offer from rival Nexo Financial.

Celsius is one of the largest centralized gateways to crypto. It raised $864m of venture capital and at one point custodied over $3 billion of funds for 1m+ customers. As of today, it appears insolvent, and it’s taking the whole crypto market with it.

Crypto lender Celsius Network said on Sunday evening it would pause all withdrawals and transfers for customers as crypto assets continued to get battered.

“Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, swap, and transfers between accounts,” Celsius Network said in their statement. “We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.”

„We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets. Furthermore, customers will continue to accrue rewards during the pause in line with our commitment to our customers.

We understand that this news is difficult, but we believe that our decision to pause withdrawals, Swap, and transfers between accounts is the most responsible action we can take to protect our community.”

Pausing account withdrawals is a drastic action, according to L.P., a pseudonymous crypto entrepreneur and investor who started and runs the crypto-focused investor protection and educational resource, RugDoc.io.

“If they paused withdrawals especially considering these market conditions, it’s fair to say they are risking insolvency,” said L.P.

NEXO STEPS IN TO RESCUE RIVAL CELSIUS ON APPARENT INSOLVENCY

Celsius Network, a cryptocurrency lending and borrowing platform, has received an unsolicited acquisition offer from rival Nexo Financial.

After what appears to be the insolvency of Celsius and mindful of the repercussions for their retail investors & the crypto community, Nexo has extended a formal offer to acquire qualifying assets of Celsius after their withdrawal freeze.

Operating a sustainable business for 4+ years, based on solid fundamentals and prudent risk management, Nexo is in a strong liquidity and equity position as evidenced by the only real-time reserves attestation of a blockchain finance company: https://lnkd.in/e4xjEmPx

„We firmly believe that acquiring all or part of Celsius’ qualifying, outstanding collateralized loan receivables will go a long way in providing immediate liquidity to Celsius clients. We are still waiting to hear from their management and will update you.” Nexo said on linkedin.

“As the leading global provider of crypto-backed credit lines and a digital assets institution whose business now spans an exchange offering and institutional-focused capabilities, among others, we’re uniquely positioned to offer a strong buffer,” the company says.

Nexo warned that its offer will expire by June 20, unless otherwise rejected by Celsius or withdrawn, it added in a letter of intent.

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Between Friday and Sunday evening the total market capitalization for crypto assets sold off by more than $162 billion, a drawdown of 13.4% from $1.19 trillion to $1.03 trillion according to Coinmarketcap. Celsius Network’s CEL token has plummeted more than 50% in the last 24 hours.

Credit photo: Coincentral