CoinLoan, an Estonia-based cryptocurrency platform, has suspended all user withdrawals and activity, becoming the latest crypto firm to close down operations.
“A Notice of restraint on disposition received yesterday, April 24, 2023, obliges CoinLoan to halt all operations for its users, including withdrawals,” the firm said in its blog post. “This action is unexpected and has immediate effect. As a result, we have no choice but to comply with the said requirements.”
According to the notice, CoinLoan cannot dispose of assets without the approval of a provisional liquidator. It also implies that bankruptcy processes are underway, however CoinLoan has not announced filing for bankruptcy.
CoinLoan previously restricted user withdrawals in July 2022, at the time that the crypto lending business saw major failures. It also cut withdrawal limitations in November 2022, around the time FTX went bankrupt. The reductions were justified by the corporation based on higher-than-usual withdrawals rather than exposure to the affected companies.
CoinLoan set daily withdrawal limitations of $5,000 on both occasions.
Further in the blog post, the firm said that its Estonian legal entity (CoinLoan OÜ) is a member of the CoinLoan group, and the interim trustee’s consent is now required for all operations involving any interaction of CoinLoan OÜ inside the group that may imply any liabilities for CoinLoan OÜ.
“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,” the firm added.
CoinLoan said it is going to file an appeal, but it must also obey the existing court ruling, hence the wind down of operations.
“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,” CoinLoan said.
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