The great crypto implosion of 2022 is starting to look more and more like a classic run on the banks.
Crypto futures and lending exchange platform Coinflex shocked users on Thursday with an announcement saying it would pause all withdrawals, citing “extreme market conditions” and continued uncertainty. Users are, as of press time, unable to pull any money out of their Coinflex accounts. The hectic pause comes one week after similar sudden withdrawal freezes at Celsius and Binance, two of the biggest cryptocurrency exchanges in the world.
In his blog post, Coinflex CEO Mark Lamb said he was “confident” the situation would be repaired and result in a restoration of withdraws. Market conditions aren’t looking good, though. Bitcoin recently dipped to its lowest point in 18 months and sent droves of crypto owners swimming for shore. Lamb gave an estimated date for when withdrawals would be allowed again: June 30, with an update pegged for June 27.
“Please note that these dates are estimates based on our current understanding of the situation,” Lamb said. “We will give more clarity on the details and updates to the situation as soon as possible.” Coinflex did not immediately respond to a request for comment.
Coinflex wasn’t’ the only one feeling the heat this week. On Wednesday, trading platform Voyager announced it decided to cut its daily withdrawal limit by more than half, $25,000 to $10,000. Voyager’s belt-tightening came after it announced it was considering issuing a notice of default to the hobbling crypto hedge fund Three Arrows Capital. Voyager claims Three Arrows Capital owes it a devilish $666 million worth of Bitcoin in unpaid loans. The hedge fund reportedly failed to meet its margin calls from lenders earlier this month. Voyager did not immediately respond to a request for comment.
The crypto withdrawal halting horrorshow kicked off last week with Celsius. Babel Finance, another major player in the space, followed suit days later due to what it described as “major fluctuations,” in the crypto market.
Now there are serious concerns about whether crypto holders will ever see any of their money. In a troubling development last week, Celsius announced it was pausing its regular Twitter Spaces and Ask Me Anything sessions as it “navigates unprecedented challenges.”