Users of the platform have also reported difficulty withdrawing funds for more than a week. Customers’ money is safe, according to Coinlist. It stated, “We hold all of our users’ assets dollar for dollar.”
The company also said it was neither bankrupt nor illiquid and denied reports on Twitter, despite its users being unable to withdraw assets. She clarified that the incident was essentially a technical issue impacting deposits and withdrawals, rather than a liquidity crisis.
According to Coinlist, it is not on the edge of going bankrupt since it has addressed the chronic FUD issue, adding that the explanation, as Wu suggests, is invalid.
First, what is CoinList?
CoinList is a cryptocurrency trading platform based in the United States launched in 2017 by Andrew Bromberg, Brian Tubergen, Graham Jenkin, Joshua Slayton, Kendrick Nguyen, and Paul Menchov. The corporation’s offices are located in San Francisco, California.
One of the finest characteristics of this platform is that it includes the most recent cryptocurrency tokens, which you may invest in before they are available in other marketplaces.
You can also join Defi by changing your bitcoins into wrapped bitcoins.
So, what’s happening with CoinList?
In order to improve its offerings and services, CoinList disclosed that it is modernizing its internal ledger technologies and moving wallet addresses that have multiple custodians.
It had earlier noted that an outage occurred during maintenance performed by a custodial partner, which was the cause of the disruption in cryptocurrency withdrawals. proving that this is the cause of the alleged withdrawal issues. Wu tweeted, “This partner is not identified.”
According to CoinList “As with any big undertaking, there are bumps along the way. Custodian issues mean some tokens are taking longer than anticipated to migrate (ROSE, CFG, FLOW, MINA). One of our custodians had an outage yesterday unrelated to the migration that impacted many tokens on CoinList.”
Colin Wu, a cryptocurrency-focused writer, tweeted that “certain community members” using CoinList had been unable to withdraw for more than a week due to maintenance. Stopping withdrawals has been a warning indicator of impending insolvency in recent weeks.
CoinList has a creditor claim worth $35 million against insolvent crypto hedge firm Three Arrows Capital, which Wu described as a “loss” in his tweet. This raises the possibility that the corporation is bankrupt or illiquid.
After Wu tweeted that users had reported being unable to withdraw money for more than a week, cryptocurrency exchange CoinList turned to Twitter to address the “FUD.” CoinList declared on November 24 on Twitter that the crypto exchange is “not insolvent, illiquid, or near to bankruptcy.” “There is a lot of FUD going around that we would like to address head-on”
“Once again, this is purely a technical issue, not a liquidity crunch,” CoinList explained. It stated that it kept “all users’ assets in dollars” and said it would share documentation of its cash reserves.
Is Coinlist in danger of going bankrupt?
According to one of Wu’s tweets, Digital Currency Group‘s “Coinlist Custody Partners are Anchorage, Bitgo, Gemini Custody, and Silvergate Bank” participated in Coinlist’s Series A investment round in 2018. Wu questions if Genesis, which is on the edge of collapse, is connected to Coinlist.
Genesis, the trading arm of Digital Currency Group (DCG), has suspended withdrawals. As a result of owning a major percentage of the loans owed by the collapsing businesses FTX and Three Arrows Capital, the company, which was one of the largest and most established players in the field of crypto financing, is facing bankruptcy.
Considering that four cryptocurrencies, ROSE, CFG, FLOW, and MINA, are now inaccessible for deposits and withdrawals as of November 15th, Coinlist’s status page also displays “worsening performance” for withdrawals.
Thus, it can be claimed that many notable cryptocurrency firms might be erased under these conditions, especially in light of FTX’s collapse.