Bitcoin and altcoin lending company CoinLoan has announced that it will reduce its daily withdrawal limit from $500,000 to $5,000. The Estonia-based platform drew attention to the panic caused by the liquidity problems of its competitors. Because of this, he said, there has been a “spike” in customers’ withdrawals. He claimed that current liquidity levels are sufficient to meet customer needs. Meanwhile, the platform’s altcoin CoinLoan (CLT) fell. Here are the details…
CoinLoan has restricted its transactions
CoinLoan joins the list of CeFi companies struggling after the brutal market downturn. CoinLoan has set a new daily withdrawal limit for its customers. It dropped 99 percent from its previous limit. The company claimed it was “not affected” by the recent market turmoil, but said it implemented the change due to the spike in fund withdrawals. The crypto lending and trading platform announced today that it has introduced a new daily withdrawal limit of $5,000 per user. The previous limit was $500,000 per day. CoinLoan said the measures will be temporary but take effect immediately.
CoinLoan boasts of being “probably the only company unaffected” by recent stablecoin crashes, the disappearance of hedge funds, or liquidity issues with major protocols. However, he claimed that the “turmoil” caused by the affected crypto companies led to a spike in withdrawals. The new withdrawal limit has been called a “measure” by the company to ensure a balanced flow of funds and prevent “liquidity related disruptions”. He claimed that the current level of liquidity is sufficient to meet all customer needs. But he said it would be “more convenient” from a business point of view if he stopped all withdrawals.
CoinLoan’s altcoin project drops
Founded in 2017, CoinLoan is one of the oldest “CeFi” platforms in the crypto space. CeFi is a term used to describe centralized companies that leverage decentralized finance (DeFi) protocols for high returns. The company currently offers a 12.3 percent annualized rate of return on stablecoins and fiat currencies (British Pounds, Euros). It provides returns of up to 7.2 percent on Bitcoin and other cryptocurrencies.
CoinLoan joins the growing list of major CeFi players, such as Celsius, BlockFi, and Vauld, who are struggling with liquidity issues following the prolonged downturn in the crypto market and the collapse of multi-billion dollar crypto hedge fund Three Arrows Capital. Voyager, another crypto exchange, had secured a $600 million loan from Alameda Research. However, as we reported as Kriptokoin.com, it paused withdrawals from its platform even after that. Following their announcement of withdrawals, CoinLoan’s coin dropped from $17 to $14. At the time of writing, it is changing hands at $15.32, down 5.7 percent.
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