On Sunday evening, the Celsius cryptocurrency fell sharply, which reflected and intensified the turmoil that engulfed the entire cryptocurrency ecosystem.

Citing “extreme market conditions,” Celsius suspended withdrawals from its network. On Sunday, the CEL/USD rate fell by 45%, continuing the decline since the beginning of the year. The cryptocurrency was trading at a price of $0.195 as of 23:30 Eastern time (03:30 GMT), compared to $4.45 at the beginning of the year.

This influence is felt throughout the crypto space: bitcoin is trading at $25,154, that is, almost 9% lower, and ethereum has decreased by 7.5% to $ 1,342.

The cryptocurrency sector has faced obstacles due to the recent collapse of the Terra Luna token, as well as due to general risk aversion amid rising inflation and the “hawkish” position of the US central bank. Like Terra Luna, the Celsius token was part of a network that included several classic financial functions, such as loans to crypto assets and receiving interest on crypto assets.

Celsius boasts that it has more than 1 million users and is a larger bitcoin holder than MicroStrategy (NASDAQ: MSTR) and Coinbase (NASDAQ: NASDAQ:COIN), and last time last fall attracted assets estimated at $3.5 billion.

The Celsius platform works almost the same as a regular bank, except for the very fact of cryptocurrency participation in operations: it collects deposits and then lends them.

The advertisement on the Celsius website promises an annual income of 18.63% on crypto deposits. Only unlike the bank, Celsius does not have FDIC state insurance, which protects people in case of bank bankruptcy.

Skeptics have repeatedly warned that the Celsius network is doomed to failure. Some even claimed that it was a banal pyramid scheme.

At the same time, Celsius is a very large financial institution that is considered and actively influences the crypto markets. And even investors who are not directly involved in cryptocurrency transactions often turn to Celsius to attract investments (for example, the second largest pension fund in Canada, Caisse de Dépôt et Placement du Québec, did so).

Anyway, in a letter to clients, Celsius management assures that “the ultimate goal of the company is to stabilize liquidity.”

The date of resumption of operations, when customers will again be able to withdraw funds and conduct various transactions, is not called in the company, because the stabilization “process will take some time, and there may be delays”