Withdrawals have been halted by the DeFi lending giant Celsius.

The Celsius Network, one of the largest crypto lenders, paused withdrawals, Swap, and account transfers Sunday night. Customers number 1.7 million.

CoinMarketCap lists the company’s token, CEL, at 23 cents. On April 8, CEL was worth $3. Last year, the token was worth $7.

High yields, connections to bankrupt stablecoin Terra, and reserves have been questioned. The platform’s assets fell from $24 billion in December 2021 to $12 billion in May. The Financial Times reported a $1 billion outflow between March and May.

Celsius has the reserves (and more than enough ETH) to meet obligations, according to its liquidity risk management methodology.

Celsius acts like a bank, but with bitcoin. It borrows deposits. Celsius’s website currently advertises an 18.63 percent annual return on crypto investments. Celsius lacks FDIC protection that protects against bank failures.

Celsius Network is doomed, say sceptics. Celsius has been called a Ponzi scheme.

Celsius’ size affects other cryptocurrency marketplaces. Celsius Network borrowed $500 million from stablecoin Tether. Bloomberg stated the loan was $1 billion. Bitcoin secures the loan. Celsius CEO Alex Mashinsky told the Financial Times last year, “If Bitcoin decreases, they offer us a margin call.”

Even non-cryptocurrency investors have exposure to Celsius. The company raised $400 million from Canada’s second-largest pension fund, CDPQ.

Celsius Network’s operations interest regulators. New Jersey, Texas, and Alabama all asked Celsius Network on September 17, 2021 why it shouldn’t be outlawed within a month. In October 2021, New York Attorney General Letitia James requested information on Celsius’s activities and products. Celsius indicated it was collaborating with state officials.

More: Celsius’ CFO was arrested in Israel for money laundering, fraud, and sexual assault. After his arrest, Celsius suspended him for alleged misconduct at his former position. Celsius network lost $54 million in crypto when BadgerDAO was attacked in December. Celsius said user and client assets were safe.

Celsius told customers its “ultimate goal is stabilising liquidity.” It didn’t say when clients may withdraw again, adding that “this process may take time.”