The number of crypto lending platforms that allow users to take their crypto home is gradually decreasing. One company even reported that its users drained their accounts by almost $198 million in total over the past three weeks.
CoinLoan announcement On Monday, it was putting a big hold on users’ ability to withdraw most of their crypto assets. That same day, Vauld essentially gave his clients a fatherly pat on the head, telling them “it’s for your own goodas he canceled withdrawals completely. The latter company is said to be looking for its own “Daddy Warbucks” to help the company deal with the hard and cold hell of the “crypto winter.”
CoinLoan told users on its blog that it limits the total amount of daily withdrawals to just $5,000 in a 24-hour period in an effort to limit the flood of withdrawals to a trickle. The company said so would lift the limitation “once market conditions permit”.
This is an almost 99% reduction in the overall withdrawal limit from its initial level. $500,000. The company praised itself for not having halted all withdrawals “like some other companies have done”, adding that “the users who have entrusted their funds to us are our highest priority”.
Crypto users are looking to abandon certain ships en masse, and companies are using corks to plug holes in their sinking ships. Vauld CEO Darshan Bathija wrote on the company’s blog that its suspension of withdrawals was due to “a combination of circumstances such as volatile market conditions, financial difficulties of our major trading partners which inevitably affect us and the current market climate which has led to a large amount of customer withdrawals exceeding $197.7 [million] since [June 12].”
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Both companies are joining a slew of other crypto platforms, including Coinflex, Celsius and Binance which have stopped or massively limited withdrawals. The Singapore-based company Vault had just cut total staff by 30%, according to executive email statements sent to Money control. Other companies like BlockFi and Crypto.com announced similar drastic cuts due to the price of crypto maintaining its bear market condition.
Bathija wrote that they were discussing moves with potential investors. Reuters reported on Tuesday that London-based crypto lending platform Nexo is considering buying Vauld to “accelerate its deeper presence in Asia.” It is not yet known how much this buyout could be worth. Reuters pointed to an Indian newspaper The Hindu industry who previously reported that the company had $1 billion in assets and wanted to top $5 million this year.
Although even though Nexo is considering an expansion into the crypto space, many bears still doubt the health of the incredibly unregulated industry. Three Arrows Capital – a huge crypto hedge fund – recently defaulted on millions of bitcoin loans and was ordered to pay liquidate one’s assets by a court in the Virgin Islands last week. That doesn’t mean there isn’t a lot of money still being pushed into some crypto projects by investment firms looking to prop up the struggling crypto market.
