Crypto bank with close ties to Israel bars withdrawals amid cryptocurrency collapse

Celsius Network, cryptocurrency lender founded by Israeli ex-pats in the US, halts withdrawals amid massive decline in Bitcoin and other cryptocurrencies.

By World Israel News Staff

A major American cryptocurrency lender with close ties to Israel has barred clients from making withdrawals from their accounts, following a sharp decline in cryptocurrency markets.

The Celsius Network, a New Jersey-based ‘crypto bank’ established in 2017, allows clients to deposit cryptocurrencies, or borrow cryptocurrency.

Prior to last Sunday’s announcement that clients would temporarily be unable to make withdrawals from their accounts, Celsius offered yields as high as 19 percent.

The company vowed that despite the freeze, it would “honor, over time, withdrawal obligations.” No timeline was given, however, for when clients would be granted full access to their accounts.

Celsius has some 1.7 million customers and over $10 billion in assets.

Founded by Alex Mashinsky, a Soviet-born émigré to Israel, Celsius maintains an office in Israel with over 100 employees.

Alongside Mashinsky, the company’s CEO, Celsius includes a number of other senior Israeli officers, including cofounders Daniel Leon, Celsius’ CSO, and Nuke Goldstein, the company’s CTO. Until mid-2021, Yaron Shalem served as CFO.

Last November, Shalem was arrested in Israel as part of a major bust of suspected crypto scam artists accused of defrauding investors worldwide.

On Wednesday, Mashinsky spoke out publicly for the first time since Celsius’ announcement last Sunday, tweeting that the company “is working non-stop” to resume normal service.

“Celsius Network team is working non-stop. We’re focused on your concerns and thankful to have heard from so many. To see you come together is a clear sign our community is the strongest in the world. This is a difficult moment; your patience and support mean the world to us.”

Crypto markets have been hit hard in recent months, with the supposedly safe “stablecoin” currency Terra imploding last month, erasing $45 billion in a week.

On Saturday, Bitcoin, the most popular cryptocurrency, plummeted by 9% to less than $19,000, its lowest value since November 2020 and far below its peak of $69,000.

Ethereum, another widely followed cryptocurrency that’s been sliding in recent weeks, took a similar tumble on Saturday.

Cryptocurrencies, which soared in the wake of the SARS-CoV-2 pandemic amid fears of pending inflation, have declined in part due to signals from the US Federal Reserve and other central banks of tightening monetary policies.

On Friday, the Federal Reserve declared an “unconditional” war on inflation, with even Atlanta branch President Raphael Bostic – a noted inflation dove – vowing to do “whatever it takes” to curb price hikes.

With the announcement, the Federal Reserve is now expected to ratchet up interest rates over the next six months to 3.4% for the benchmark lending rate.