Celsius Network ‘will take time’ to restore transactions, as several US states launch investigations into crypto firm amid industry tailspin

Cryptocurrency company Celsius Network says it will take time to normalize operations after suspending customer withdrawals and transfers a week ago.DADO RUVIC/Reuters

Regulators in several US jurisdictions are investigating Celsius Network Ltd., which last week halted all transactions and withdrawals for its nearly two million customers, sending cryptocurrencies into a global tailspin.

In a blog post on Monday, Celsius said it “will take time” to normalize operations, as it works with officials to come up with a resolution for its self-described pause in cryptocurrency lending and investing services. That means customers around the world are still unable to pull out their money from the New Jersey-based platform, while a wider industry rout sends digital assets and tokens such as bitcoin plummeting to lows not seen since 2020.

Securities regulators in Kentucky, New Jersey, Texas, Alabama and Washington confirmed to The Globe and Mail that they are now probing the matter. The officials said the investigation was in the early stages, but that they could not provide further details because it is active.

The US Securities and Exchange Commission declined to comment.

Celsius has long touted itself as the “world’s leading crypto earning and lending platform” and held more than US$11-billion in assets as of last month, before it abruptly closed down services on June 13, citing “extreme market conditions.” Among its major investors around the world is Canadian pension fund giant Caisse de dépôt et placement du Québec, which invested US$400-million in Celsius as part of a funding round late last year.

Celsius did not respond to The Globe’s requests for comment.

On Friday, Celsius chief executive officer Alex Mashinsky canceled his appearance at Collision, the global technology conference that kicks off in Toronto this week. Also that day, Mr. Mashinsky canceled an Ask Me Anything (AMA) session with YouTube just minutes before it was set to air.

“We are pausing our Twitter Spaces and AMAs to focus on navigating these challenges and seeking to fulfill our responsibilities to our community,” Celsius wrote in its blog post on Monday. It people warned to be vigilant of social-media accounts purporting to be associated with the company.

“We want our community to know that our objective continues to be stabilizing our liquidity and operations. This process will take time.”

Bitcoin has fallen by 37 per cent this month and by more than 57 per cent this year. It recently plunged well below the psychologically important level of US$20,000 – hovering around US$18,000 on Saturday and Sunday, before bouncing back to just under US$20,000 on Monday. That price level is of symbolic significance, as it was roughly the peak of the 2017 cycle before the bottom fell out.

Meanwhile, ether, which is the second-most popular cryptocurrency, fell below its symbolically important level of US$1,000 this weekend. On Monday, ether rose to around US$1,100.

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