CoinFlex Suspends All Withdrawals, Cites ‘Extreme Market Conditions’

In a blog post, Managing Director Mark Lamb also indicated that exchanges of the cryptocurrency brought by CoinFlex, the Flex, were suspended until further notice.

Cryptocurrency exchange CoinFlex on Thursday announced the suspension of all fund withdrawals, citing “extreme market conditions” and financial risk to a customer, another episode in a tumultuous streak for the digital device industry. .

Asked by AFP about the value of the assets subject to this suspension, CoinFlex, whose headquarters are currently located in Mahé (Seychelles), was not followed up. On its site, the company indicates that in January, the platform reached 1,000 billion dollars in transactions since its creation.

In a blog post, Managing Director Mark Lamb also indicated that exchanges of the cryptocurrency brought by CoinFlex, the Flex, were suspended until further notice.

Slump

The move comes ten days after a similar announcement from another crypto platform, Celsius Network, which claimed $11.8 billion in assets under management in mid-May.

Last Friday, it was the Asian player Babel Finance who, in turn, blocked any withdrawal from its platform.

The sharp drop in most cryptocurrencies since early June has shaken the industry, especially platforms that offer to lend or borrow cryptocurrencies, which is the case with CoinFlex, Celsius and Babel Finance.

These violent fluctuations are, in fact, brutally evaluating the value of the loans as well as the assets deposited as collateral for these loans, often cryptocurrencies.

These variations notably trigger margin calls, which means that the reduced guarantees for a loan are no longer sufficient and that the borrower must increase them, which can put him under financial pressure.

Withdrawals back on June 30?

The need for traders subject to margin calls to find funds quickly and the rise of a climate of mistrust linked to market turbulence can trigger massive withdrawals, as is sometimes the case in the event of a banking crisis.

To prevent them and stabilize their financial situation, platforms are sometimes required to suspend withdrawals.

“We expect to be able to allow new withdrawals as soon as possible,” assured Mark Lamb, of CoinFlex, in his message, estimating this deadline at June 30.

The executive also claimed that the client who was the subject of “uncertainty” was not Three Arrows Capital, a Singapore-based alternative cryptocurrency investment firm, in dire straits after posting heavy related losses. to market correction.

The cryptocurrency lending market is currently unregulated. On Monday, the President of the European Central Bank, Christine Lagarde, called on the European Union to regulate its practices by strengthening European regulations on cryptocurrencies, which are due to take effect in 2024.

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