CoinLoan pauses withdrawals – Crypto-backed loan company CoinLoan announced a halt to all withdrawals and user services. The Estonia-based cryptocurrency platform made this known in a blog post on April 25.
According to the post, the company received a “notice of restraint” on April 24 which requires it to make the decision. CoinLoan stated that it had no choice but to comply and that the changes will take place immediately.
“A Notice of restraint on disposition received yesterday, April 24, 2023, obliges CoinLoan to halt all operations for its users, including withdrawals. This action is unexpected and has an immediate effect. As a result, we have no choice but to comply with the said requirements. We are doing everything possible to resolve this situation as quickly as possible.”
Though CoinLoan has not verified bankruptcy, the notice suggests a potential bankruptcy proceeding coming. The company referred to the notice as “unexpected” while stating that the halt will take effect immediately.
“Our legal team has provided sufficient arguments to prove CoinLoan’s ability to fulfill its obligations. The appointment of the interim trustee seems to be the easiest way for the court to find a solution by letting an independent third party verify the financial situation of the company. We are going to file an appeal, but we must also obey the existing court ruling.”
CoinLoan went on to express its regret for the decision and apologized for the effect it will have on “CoinLoaners.” The statement reads:
“Pausing all activities on the platform is a difficult decision, and we have made it with a heavy heart. We understand that this news has an impact on all CoinLoaners, whose interests have always been our priority.”
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Finally, it promised to take all necessary steps to protect its users’ assets.
Where it started
Back in 2022, a series of plagues hit the cryptocurrency industry which resulted in several firms declaring bankruptcy and crashing. A typical case is that of FTX. Following the 2022 mess, CoinLoan had already warned in July 2022 following the Terra crisis and also the crash of various crypto funds. In that same month, CoinLoan limited user withdrawals.
Fast forward to November 2022, following the FTX crash, it once again reduced users’ withdrawal limit. In its defense, the company tied the placed withdrawal limit to “higher-than-usual withdrawal” requests and not its exposure to the affected companies.
In both cases, the withdrawal limit was set to $5,000 USD and there was no clarification if the limit would be lifted at any point in time.
