Due to the difficult economic situation, the Estonian cryptocurrency lending platform CoinLoan has temporarily limited the withdrawal of assets by users to $5,000 per day.
The change in company policy went into effect on July 4. According to the project team, the platform will return to the previous limits after the market situation stabilizes. CoinLoan maintains that client funds are safe and the cap decision is not related to the collapse of Terra or companies that are in a state of potential default.
Representatives of CoinLoan noted that the platform did not engage in ether staking and its policy prohibits investments in “risk activities”. The company’s decision is related to the massive withdrawal of funds by users after the default of companies such as Celsius, Voyager and BlockFi. CoinLoan explained:
“The interest we pay on interest-bearing accounts is earned by issuing over-collateralized loans to other users of the platform. Therefore, in some cases, the expected date for the full withdrawal of assets from interest-bearing accounts occurs before, and not after, the closing of the loan.
The project team claims that it has distanced itself as much as possible from the spread of a wave of defaults among cryptocurrency hedge funds and credit organizations, and is able to protect users’ assets. The company considered the possibility of a complete blocking of funds, but it was decided to introduce only a temporary limit on withdrawals.
Not all companies were susceptible to the wave of defaults caused by the collapse of Terra. Last week, KuCoin trading platform CEO Johnny Liu denied default rumors and stated that the exchange is operating as normal without experiencing any difficulties due to the insolvency of LUNA and Three Arrows Capital.
Source: Bits
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