CoinFLEX cited extreme market conditions last week and continued uncertainty involving a counterparty as reasons to halt withdrawals. The firm will also halt all FLEX Coin trading in perps and spot in the short term
Crypto exchange CoinFLEX is the latest in the list of firms suspending withdrawals recently. CoinFLEX cited “extreme market conditions last week and continued uncertainty involving a counterparty” as a reason for pausing all withdrawals.
The firm further pointed out that the counterparty involved is not 3 Arrows Capital(3AC) or any other lending firm. Unconfirmed reports state that 3AC, which had roughly $3 billion in assets under management in April 2022, had failed to meet margin calls on several of its undercollateralized loans and is currently on the brink of insolvency.
According to the official announcement, the firm will also be halting all FLEX Coin trading in perps and spot in the short term. CoinFLEX stated that it would provide an update on June 27. The firm further hopes to resume withdrawals by June 30. Following the announcement, FLEX coin fell 4.1% to $4.31. The coin has tanked 43% since reaching an all-time high of $7.56 in December.
CoinFLEX becomes the latest crypto firm to either halt or limit withdrawals after Celsius, Babel Finance, Finblox, and Voyager Digital. Earlier this month, Celsius said in a blog post it was “pausing” all withdrawals and transfers between accounts citing extreme market conditions. Bitcoin financial service firm Babel Finance following footsteps of Celsius, also suspended redemptions and withdrawals citing “unusual liquidity pressures”.
Recently leading Crypto staking platform, Finblox imposed a $1,500 monthly withdrawal limit and paused rewards in light of the uncertainty surrounding 3AC’s financial stability. To top it all off, the New York-based digital assets firm Voyager Digital’s shares dropped 60% after revealing a $655 million exposure to 3AC.
The past two months have been tough for crypto holders, with the market dropping over 50% and BTC/Ethereum bleeding to extremely concerning levels. CoinFlex’s recent announcement will likely motivate other crypto firms to cave in to the pressure and halt withdrawals soon.