CoinFLEX, a cryptocurrency derivatives exchange, stated today that it is discontinuing account withdrawals on its platform, claiming a problem with a counterparty. “Due to extraordinary market situation last week and ongoing uncertainty concerning a counterparty, we are stopping all withdrawals today,” CEO Mark Lamb stated in a business blog post.
Withdrawals will be reinstated “as quickly as feasible” once the firm is in a “better situation,” according to the statement. However, no exact date was mentioned.
Furthermore, all futures and spot trading in the company’s native cryptocurrency, FLEX coin, will be halted. Customers of CoinFLEX utilize the token, similar to Binance’s BNB, to minimize trading costs on the exchange.
However, CoinFLEX clarified that the troubled counterparty in question is not Three Arrows Capital (also known as 3AC) but “any lending firm,” which would include BlockFi and Celsius—two firms known to be in financial distress, with the latter potentially causing further contagion in the crypto market.
Three Arrows was one of the greatest institutional casualties in the crypto business this month, as its over-leveraged cryptocurrency investments were liquidated when market values plummeted. For years, the hedge fund has been a prominent player in the digital asset industry, spearheading a $9 million fundraising round for the NEAR protocol just two months ago, as well as numerous others before that.
“We are sure that CoinFLEX can entirely resolve this problem by restoring all functionality, namely withdrawals,” stated CoinFLEX’s Lamb.
Voyager Digital, a bitcoin broker, is the latest company to face the impact of 3AC’s bankruptcy. The company’s stock dropped 60% after it revealed its $661 million exposure to 3AC on Wednesday. Following that, the business reduced its daily withdrawal amount by 60%.
Author: Ritik Joshi
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