The Celsius Network, a decentralized finance (DeFi) platform and one of the largest crypto lenders, has announced to pause all withdrawals, swap and transfers between accounts due to "extreme market conditions".

As a result of this decision, the price of its digital token 'CEL' crashed by about 55% and dropped to 19 cents. Celsius was valued at $3.25 billion in November last year.

"We are taking this action today to put Celsius in a better position to honour, over time, its withdrawal obligations," the crypto lender said in a statement late on Sunday.

Celsius Network is a blockchain-based lending platform that is accessible through a free mobile app. It was announced on Sunday night that it was "stopping all withdrawals, exchanges and transfers between accounts."

As of May 17, Celsius had $11.8 billion in assets, its website said, down by more than half from October, and had processed a total of $8.2 billion worth of loans.

The tragic explosion of TerraUSD and Luna cryptocurrencies shocked many investors last month, with some saying that all their assets had been blown up.

In a crash, the once bullish TerraUSD and sister coin Luna had lost almost all their value, sending shock waves across the world.

After Celsius's announcement, Bitcoin hit an 18-month low of $23,476 and World's second largest token ether dropped as much as 16% to $1,177, its lowest since January 2021.

Celsius offers interest-bearing products to customers who deposit cryptocurrencies on its platform and then lend cryptocurrencies to earn returns.

"It's still an uncomfortable moment, and there's some contagion risk around crypto more broadly," said Joseph Edwards, head of financial strategy at fund management firm Solrise Finance.