CoinLoan Stops All User Services Including Withdrawals, Indicates Bankruptcy

Key Points:

• Cryptocurrency lending platform CoinLoan suspends all user services, including withdrawals.
• The suggestion is that the company is going through bankruptcy proceedings even though it has not officially filed for bankruptcy.
• The platform’s surprise announcement was made due to “no other choice”.

On April 26, crypto lending platform CoinLoan announced in a recent announcement that it had received a notice of restricted processing, asking to stop all user activities, including user withdrawals.

CoinLoan called the announcement “surprise” and said the changes would take effect immediately, adding that it “had no choice but to comply.”

“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.”

The notice also states that CoinLoan cannot dispose of assets without the consent of the temporary liquidator. It also hinted that bankruptcy proceedings are underway, although the company has not confirmed that it has filed for bankruptcy.

“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.”

The lending platform has been waning since July following the Terra crisis and the collapse of a series of significant crypto funds. It had to limit user withdrawals in July 2022, which also applies to the FTX crisis in November 2022. In both cases, CoinLoan set a daily withdrawal limit of 5,000 dollars, and it needs to be clarified if the platform will remove this withdrawal limit.

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