How crypto lender Celsius stumbled on risky bank-like investments

FILE PHOTO: Celsius Network logo and representations of cryptocurrencies are seen in this illustration taken, June 13, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

(Reuters) - Celsius Network, the retail crypto lending platform whose liquidity problems have sent cryptocurrencies plunging, stumbled on complex investments in the wholesale digital asset market in what analysts say was akin to a traditional bank run.

Citing extreme market conditions, New Jersey-based Celsius this week froze withdrawals and transfers between accounts "to stabilize liquidity." In a video on Friday, the company's finance chief said Celsius, along with the industry, had seen redemptions rise following the collapse of cryptocurrency TerraUSD in May.