Crypto Lending Platform CoinLoan Halted Due to Restraining Order

Estonia-based crypto lending platform CoinLoan has halted all user activity and withdrawals due to a notice of restraint on disposition, as stated in a blog post on April 25th.

The notice of restraint on disposition prevents the company from disposing of assets and requires it to stop all user operations, including withdrawals without the consent of a provisional liquidator. The notice suggests that bankruptcy proceedings may be underway, however, CoinLoan has not confirmed this publicly, and it is only an assumption.

The company says that halting operations was unexpected, and that it has no choice but to comply with the notice. CoinLoan previously limited user withdrawals once in July 2022 when widespread failures in the crypto lending market had occurred and reduced withdrawal limits in November 2022 when FTX faced collapse. The reductions were made due to higher-than-usual withdrawals rather than exposure to affected companies. However, the exact date when withdrawal limits were reversed is unknown.

News of the notice caused concerns, and CryptoPotato has reported, “Currently, it’s unknown the reason(s) behind Estonia’s initiative, given that regulators in the tiny EU state are undoubtedly among the most advanced worldwide regarding cryptocurrency licensing as Estonian law allows operators to provide virtual currency and wallet services and align EU standards of the  money laundering directive.”

The cryptocurrency industry knows no boundaries or restrictions as social media on such platforms, including attempts sparking excitement over new digital asset providers. Unexpected halt, regulatory pressure or a mishap by a company such as CoinLoan, saddens many because in many cases, such uncertainty spreads industry-wide.

[h/t Mike Dalton]