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Cryptocurrency loan platform ‘CoinLoan’ cuts withdrawal limit by 99%

Cryptocurrency lending platform ‘CoinLoan’ announced on the 4th that it will lower its daily withdrawal limit from $500,000 to $5,000. This will take effect immediately.

Regarding these measures, CoinLoan said, “Users’ assets are safe, and it is only a precautionary measure to prevent liquidity-related problems.

In addition, “The company will be the only company that is not affected by the market, such as stETH defragging, the Luna/Tera incident, the bankruptcy filing of 3 Arrow Capital (3AC), and liquidity problems in decentralized finance (DeFi).” explained that it is a preemptive measure to prevent a sharp increase in asset withdrawals from CoinLoan due to the successive transaction disruptions of competitors such as BlockFi, Celsius, and Voyager Digital.

In addition, CoinLoan said, “From a business point of view, it is more convenient to stop all withdrawals like other companies, but the user who deposited the funds has priority, so if necessary, some of the assets can be withdrawn,” he said. “We could not disable withdrawals as we understand that there may be people with savings stored there.

In addition to Coin Run, a number of Cryptocurrency CoinLoan platforms such as Celcius and Babel Finance have suspended transactions due to liquidity problems. This is believed to have been triggered by the Terra and Luna incidents. Cryptocurrency hedge fund 3AC filed for bankruptcy on the 1st after suffering a lot of damage from the incident. As a result, Voyager Digital, a cryptocurrency exchange that deposited $600 million in 3AC, temporarily suspended all trading services, and BlockFi, a DeFi company that suffered about $80 million in losses from 3AC bad loans, received an emergency loan from cryptocurrency exchange FTX.

In addition, the cryptocurrency loan platform ‘Bold’ announced a plan to apply for a ‘moratorium (debt payment deferral)’ at the same time as the suspension of cryptocurrency withdrawals on the same day as the announcement of the coin loan.