(The Hill) – Cryptocurrency companies on Monday blocked users from withdrawing funds as the value of bitcoin and other prominent digital assets plunged.
Crypto lending company Celsius Network announced late on Sunday night that it would freeze all withdrawals and transfers due to “extreme market conditions.” The move sparked an enormous selloff, with the price of bitcoin falling 12 percent to its lowest level since December 2020.
Binance, the world’s largest crypto exchange by trading volume, said Monday morning that it was freezing bitcoin withdrawals “due to a stuck transaction causing a backlog.”
Changpeng Zhao, the firm’s CEO, tweeted that the fix would only take 30 minutes but later said that the problem was “going to take a bit longer to fix” than his initial estimate.
Celsius, which says it has 1.7 million customers, made its announcement after numerous cryptocurrencies tanked over the weekend. Ethereum, another popular digital coin, plunged nearly 32 percent from Friday to Monday morning.
“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,” Celsius wrote in a blog post Sunday night.
Red-hot inflation and subsequent interest rate hikes from the Federal Reserve have driven investors away from risky assets like cryptocurrencies. Signs of trouble in the crypto market emerged last month when so-called stablecoins, which are supposed to be pegged to the price of the dollar and other traditional currencies, briefly lost value.