Crypto Exchange CoinFLEX Freezes Withdrawals Due To Counterparty ‘Uncertainty’

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Another cryptocurrency platform froze user withdrawals in response to the bear market.

Crypto derivatives exchange CoinFLEX announced today that it is halting account withdrawals on its platform, citing issues with a counterparty. “Due to extreme market conditions last week and continued uncertainty regarding a counterparty, we are announcing today that we are suspending all withdrawals,” CEO Mark Lamb said. written in a corporate blog post today.

According to the statement, withdrawals will resume “as soon as possible” once the company is in a “better position”. However, no specific date was given.

Additionally, all futures and spot contracts for the company’s native cryptocurrency, FLEX coin, will be suspended. The coin is used by CoinFLEX customers to reduce trading fees on the exchange, much like Binance’s BNB.

CoinFLEX clarified, however, that the troubled counterparty in question is not Three Arrows Capital (also known as 3AC) “or any lending company,” which would include BlockFi and Celsius.two companies known to be in dire financial straits, the latter of which could potentially cause further contagion in the crypto market.

“We are confident that this situation can be fully repaired with a restoration of all functionality, namely withdrawals,” CoinFLEX’s Lamb said today.

Three Arrows was one of the biggest institutional casualties in the crypto industry this month as its leveraged crypto positions were liquidated amid the market price crash. The hedge fund has been a major player in digital assets for years, first a $9 million funding round for the NEAR protocol just two months ago, and several more before that.

The company was also deeply invested downa former top 10 cryptocurrency that dropped to zero following the collapse of its associated algorithmic stablecoin, TerraUSD (UST).

Companies exposed to Three Arrows were forced to take action similar to what CoinFLEX has taken today. Finblox, a staking platform in which 3AC has invested, has significantly reduced its platform withdrawals this month. Meanwhile, Asian crypto lending platform Babel Finance has on break its withdrawals entirely in response to related “risk events”.

One of the latest companies to feel the aftermath of 3AC’s insolvency is cryptocurrency broker Voyager Digital. Company shares dropped 60% after revealing its $661 million exposure to 3AC on Wednesday. The company followed with a 60% To cut at its daily withdrawal limit on Thursday.

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