Even many crypto lenders are struggling to cease the withdrawal flood

A coin with the bitcoin symbol submerged in the snow.

Picture: SIVStockStudio (Shutterstock)

The number of crypto lending platforms that actually allow users to take home crypto is decreasing. One company even reported that its users spent almost $198 million in total on their accounts over the past three weeks.

CoinLoan announced Second, it has placed a major constraint on users’ ability to withdraw most of their crypto assets. That same day, Vauld essentially gave his clients a pat on the head, telling them “It’s for your own good, ”While it does not withdraw at all. The second company is said to be looking for its own “Daddy Warbucks” to help the company face the harsh cold hell of “crypto winter. “

CoinLoan tells users on its blog that it is limiting total daily withdrawals to just $5,000 over a 24-hour period in an attempt to limit withdrawals to a trickle. The company said it will lift the limit “once market conditions permit.”

That is almost 99% reduction of the overall withdrawal limit from the original level 500,000 dollars. The company went on to pat itself on the back for not stopping all withdrawals “as some other companies have done”, adding that “the users who have entrusted us with their funds are our biggest priority.” we.”

Cryptocurrency users are looking to abandon some large ships and companies are using cork to plug holes in their sunken ships. Vauld CEO Darshan Bathija wrote on the company blog that their withdrawal halt was due to a “combination of circumstances such as volatile market conditions, financial difficulties of key business partners, etc. Ours definitely affects us and the current market environment has resulted in a significant amount of client withdrawals in excess of $197.7 [million] are from [June 12]. “

The two companies join a host of other crypto platforms, including Coinflex, Celsius and Binance has paused or withdrawn in bulk. Headquartered in Singapore Vault recently cut its total number of employees by 30%, according to email reports from executives Money control. Other companies like BlockFi and Crypto.com announced similar drastic cuts as the cryptocurrency price sustains bear market status.

Bathija writes that they are discussing the moves with potential investors. Reuters reported on Tuesday that London-based crypto lending platform Nexo is thinking about buying Vauld to “accelerate a broader presence in Asia.” No word yet on how much that acquisition could be worth. Reuters pointed to the Indian newspaper Hindu business which had previously reported that the company had 1 billion dollars in assets and want to pass 5 million dollars this year.

Though even as Nexo considers expansion in the crypto sector, many bears still doubt the health of this hugely unregulated industry. Three Arrows Capital – a massive crypto hedge fund – recently defaulted on millions of bitcoin loans and ordered liquidate its assets by a Virgin Island court last week. That doesn’t mean there isn’t a lot of money still being pushed into a number of crypto projects from investment firms looking to support the floundering crypto market.

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