The hardships being faced by conventional global economy are showing signs of seeping into the cryptocurrency ecosystem as well. One of the world’s largest crypto lenders, the Celsius network, announced on Sunday that they will be “pausing all withdrawals, Swap, and transfers between accounts,” citing extreme conditions.

As the announcement surfaced, the cryptocurrency market took a nosedive. On Monday, bitcoin went down by 14% to touch an 18 month low at $22,725 before slightly recovering to $23,924. The second largest token, Ethereum, went down by 18% at $1,176. The withdrawal halt by Celsius has caused a domino effect and the cryptocurrency cumulative value has crashed to below $1 trillion.

The platform’s own token, CEL, went down by 92% at 23 cents, crashing from $3. About a year ago, CEL was valued at $7/token.

In an email sent to all users in June 12th, Celsius Network said;

Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts. We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.

Founded in 2018 by Alex Mashinsky and S. Daniel Leon, the New Jersey-based Celsius network allows users to deposit various cryptocurrency tokens like BTC, ETH etc. into a Celsius wallet to earn a percentage yield or take out loans by placing their cryptocurrency as security. Quite like a bank dealing with federally backed currency. But the catch is, Celsius does not have an FDIC Government Insurance, which protects people in case of a bank collapse.

Because of a lack of federal backing, skeptics have been warning about Celsius being a potential Ponzi scheme. It has been on the radar of state legislatures of the American states of New Jersey, Texas, Alabama and New York.

Cryptocurrencies have been under selling pressure since quite some time now, with interest rates continuing to increase and global inflation touching an all time high. US Inflation data posted on Friday revealed price rises to be highest since 1981. Recently, the collapse of stablecoin TerraUS also sent shockwaves throughout the market. The World’s largest stablecoin Tether, also briefly broke it’s 1:1 ratio with the US Dollar before recovering back to it.