Citing the “extreme market conditions”, Celsius had now paused withdrawals and transfers on its network, with the aim to stablise its liquidity and operations. With some suspecting this to be a liquidity crisis, Celsius has dropped 41% in value, with holders comparing it to the recent Luna crypto crash.
In making the decision to suspend trading, Celsius said:
In the event that Celsius becomes bankrupt, enters liquidation or is otherwise unable to repay its obligations, any Eligible Digital Assets used in the Earn Service or as collateral under the Borrow Service may not be recoverable, and you may not have any legal remedies or rights in connection with Celsius’ obligations to you other than your rights as a creditor of Celsius under any applicable laws.
This prompted some users to criticise Celsius as it could mean depositors may lose out if the network faces damage. "We all hate terms & conditions, but this is why you should start reading them from now on," said one Redditor.
Similar concerns arose earlier this year regarding Coinbase’s terms and conditions relating to bankruptcy.
Many Celsius and non-Celsius users took this discovery to reinforce their animosity towards crypto exchanges and platforms that hold cryptocurrency. “This is not a revolutionary find in their T&Cs", said one user. “Every custodial platform is the same/has the same right under their terms. If you don't hold assets in cold storage, they're not yours.”