CoinList addresses withdrawal "FUD" with technical delays
Zach Anderson Nov 25, 2022 09:45
After users complained of a week-long withdrawal freeze, CoinList addressed "FUD" on Twitter. Company claims $35 million from collapsed crypto hedge fund Three Arrows Capital. "multiple custodians" working on wallet address migration and upgrade.
After a blogger tweeted that users reported being unable to withdraw funds for over a week, CoinList, a cryptocurrency exchange and Initial Coin Offering (ICO) platform, took to Twitter to address "FUD" This came after the blogger tweeted that the situation had sparked fears that the company was having liquidity issues or was insolvent.
A blogger who focuses on cryptocurrency named Colin Wu tweeted earlier to his audience of 245,000 people that "some community members" who use CoinList have been unable to withdraw for more than a week because of maintenance.
It is likely that the fact that CoinList has a creditor claim for $35 million with the defunct cryptocurrency hedge fund Three Arrows Capital, which Wu referred to in his tweet as a "loss," sparked concerns that the company was either insolvent or illiquid.
In an effort to allay the concerns that have led to bank runs on other platforms, CoinList has explained that it is in the process of upgrading its internal systems and migrating wallet addresses to "multiple custodians"
Its status page indicates "degraded performance" for withdrawals, as four cryptocurrencies have been inaccessible for withdrawal since November 15, and one cryptocurrency has experienced delayed deposits since November 16.
According to CoinList's statement, "Once again, this is purely a technical issue, not a liquidity crunch,"
It asserted that it holds "all user assets dollar for dollar" and mentioned that it intends to publish its proof of reserves at some point in the future.
However, users are becoming increasingly anxious about centralized platforms and have rushed to ensure safe custody of their assets, as evidenced by the surge in sales reported in the middle of November by hardware wallet providers Trezor and Ledger. CoinList stated on November 14 that it did not have any exposure to the FTX exchange, which has since gone bankrupt.
At approximately the same time, the amount of Bitcoin and stablecoins that were withdrawn from exchanges reached all-time highs, and a concomitant increase in activity was observed on decentralized exchanges.
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