Saturday, February 24, 2024

CoinFLEX Exchange Freezes Withdrawals After Counterparty Uncertainty

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CoinFLEX exchange freezes the withdrawals on its platform after counterparty uncertainty and it is joining the likes of Celsius, Babel Finance, and Voyager Digital in its decision so let’s read more today in our latest cryptocurrency news.

Crypto derivatives CoinFLEX exchange announced to be discontinuing account withdrawals on the platform due to trouble with a counterparty. CEO Mark Lamb wrote:

“Due to extreme market conditions last week & continued uncertainty involving a counterparty, today we are announcing that we are pausing all withdrawals.”

According to the statement, the withdrawals will be resumed as soon as possible once the company is in a better position. In addition, the futures and spot trading for the company’s FLEX coin will be put on hold. The coin is used by CoinFLEX customers to reduce the trading fees, not unlike Binance’s BNB. CoinFlex clarified that the troubled counterparty in question is not Three Arrows Capital or any other lending company whcih will include Blockfi and Celsus as the two companies known to be in financial straits recently and will be causing further contagion on the market:

“We are confident that this situation can be repaired fully with a restoration of all functionality, namely withdrawals.”

3AC Lenders, three arrows, bitmex, liquid

Three Arrows was one of the biggest institutional casualties in the industry this month as its over-leveraged crypto positions got liquidated alogn with the market crashing. The hedge fund was a huge player in the digital asset space and led a $9 million funding round for NEAR Protocol two months ago. The company was invested in Terra which was one of the top 10 cryptocurrencies that crashed to zero after the collapse of the algorithmic stablecoin TerraUSD.

Companies with exposure to Three Arrows were forced to take similar action as CoinFLEX did and Finblox, whcih is a staking platform that 3AC invested in, reduced its platform withdrawals and in the meantime, the Asian lending platform Babel Finance paused withdrawals in response to risk-related events. One of the latest companies feeling the effects of the 3AC insolvency is Voyager Digital after the stocks of the company plummeted 60% after revealing a $661 million exposure to 3AC.

Voyager digital signed the deal that will see a $200 million cash/USDC-backed credit facility as well as 15,000 BTC to safeguard its customers’ assets from the bear market. The loan will be in two parts, the first part cash with an aggregate principal amount of $200 million, and the second will be in 15,000 BTC. Voyager will use the credit facilities if needed to protect the customer assets. The credit will expire on December 31, 2024, and will have an annual interest rate of 5% payable on maturity.

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