CoinLoan reduces withdrawal limits citing market circumstances
The cryptocurrency lender asserts that its money is secure and that it has no exposure to Luna or troubled firms such as Three Arrows Capital.
In response to the present market instability, CoinLoan, a platform that provides crypto-backed loans has temporarily restricted the withdrawal limit for lenders, the firm stated on Monday.
Several prominent crypto firms are in varying stages of the financial crisis, prompting the European crypto lender to become the latest in the industry to limit withdrawals. According to CoinLoan, the problems impacting companies like as Celsius, Voyager, BlockFi, and Three Arrows Capital have generated a flood of withdrawals on their platform.
“We pay interest on Interest Accounts by making overcollateralized loans to other platform users. Consequently, in certain cases, the expected date of a full withdrawal of assets from the Interest Accounts occurs prior to loan closure, as indicated by CoinLoan in an announcement.
In order to manage the flow of cash and minimise liquidity-related disruptions, the firm has implemented the withdrawal restriction.
As of today’s news, customers are now limited to a maximum withdrawal restriction of $5,000 per 24 hours.
CoinLoan removed itself from the crypto hedge fund and lending institution contagion. The platform maintained that it has no exposure to Luna, staked ETH, or any of the impacted companies and that its regulations restrict investments in “very dangerous activity.” CoinLoan said that client money is secure.