Key takeaways:
- The crypto network CoinLoan, based in Estonia, has declared that it has stopped all user withdrawals and activities.
- Even though the company has not formally declared bankruptcy, bankruptcy processes are underway.
According to recent reports, the European cryptocurrency lending platform CoinLoan, which has been operating since 2017 with a license from the Estonian Financial Authority, stopped all of its operations as a result of a court order.
Regulators in Estonia have forbidden CoinLoan from selling any assets without first receiving direct, preliminary approval from its liquidator. The regulator further mentioned that the order requires Mr. Martin Yen to be named CoinLoan’s interim administrator.
In a blog post on April 25, CoinLoan stated that all user withdrawals and activity had been stopped. According to the business, it has received a notice of restraint on disposition requiring it to stop all user operations, including withdrawals.
The notice specifies that CoinLoan must stop using the debtor’s assets as leverage. In essence, the debtors are forbidden from selling a single item. The order did specify that the party has 15 days to file an appeal with the Tallinn Court of Appeal in opposition to the ruling.
CoinLoan stated that they would follow the directive and are already taking action to address the problem. The network added that CoinLoan’s legal team has been working hard to demonstrate that it can meet its obligations.
“A Notice of restraint on disposition received yesterday, April 24, 2023, obliges CoinLoan to halt all operations for its users, including withdrawals. This action is unexpected and has an immediate effect. As a result, we have no choice but to comply with the said requirements. We are doing everything possible to resolve this situation as quickly as possible.”
All operations, including withdrawals, must be put on hold, according to CoinLoan, who stressed that this decision was difficult. According to the blog post, CoinLoan has allegedly already filed for bankruptcy, though the platform has not officially confirmed this information.
Around the time of the market’s widespread failures in July 2022, CoinLoan restricted user withdrawals. Additionally, it decreased withdrawal restrictions in November 2022, just before FTX‘s demise. Rather than citing exposure to the impacted companies, the company predicated its justification for those cutbacks on higher-than-normal withdrawals. Both times, CoinLoan placed a $5,000 daily withdrawal cap. It’s unknown if it ever changed the withdrawal restrictions in the past.
