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Usha Yadav
Jun 16, 2022
by Usha Yadav

Celsius CEO Alex Mashinsky Breaks 3-Day Silence

Celsius

Table of contents

  1. Celsius Paused the Withdrawals
Alex Mashinsky, the embattled company's CEO, has finally spoken out on the topic three days after the crypto lender abruptly declared that all customer withdrawals, swaps, and transfers would be halted. Those expecting answers as to when users will be able to withdraw funds again will be disappointed by Mashinsky's response. Mashinsky took to Twitter this afternoon, addressing publicly for the first time since his company's withdrawals were halted on Sunday night, to reassure the Celsius community that the company's team is working "round the clock" to resolve the issue and to ask for users' patience.

 

Celsius Paused the Withdrawals

Celsius paused withdrawals on Sunday to "stabilize liquidity" and "preserve and protect assets" after Lido's Staked Ether (stETH), a cryptocurrency provided on the platform, began to exhibit abnormalities. The Ethereum 2.0 beacon chain (which will eventually combine with the Ethereum mainnet) symbolizes stETH, designed to be pegged to the value of ETH. As a result, stETH is frequently used as collateral on platforms such as Celsius to borrow ETH. However, as other crypto markets collapsed, stETH's peg to the volatile ETH was recently lost. Celsius would sell up its stETH stores to allow clients to withdraw ETH.

If many clients withdrew protesting the recent de-pegging, Celsius would be forced to sell off a significant portion of its $472 million stETH supply. This would drive down the price of stETH even further, leaving the corporation with inadequate liquidity to meet its ETH obligations to consumers. It's unclear how Celsius would address the situation if stETH remains de-pegged from ETH (as of writing, stETH is now trading at .93 ETH).

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Celsius CEO Alex Mashinsky Breaks 3-Day Silence
Usha Yadav
Usha is a diehard crypto enthusiast and has been actively writing on different facets of the blockchain and crypto world. She has authored many research articles on cryptocurrency and aims to provide informational and quality content to readers. She firmly believes that crypto has a great potential to redefine the world of finance and blockchain.

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