CoinLoan changes withdrawal limits amid heavy market downturn

Crypto lending platform CoinLoan has announced that it is making changes in its withdrawal limits for the users “to balance the flows of funds and prevent liquidity-related interruptions.” According to the recent announcement, CoinLoan is probably the only company unaffected by the stETH, LUNA/UST disaster, Three Arrows Capital collapse, and other DeFi protocol issues.

CoinLoan affected by market incidents

The announcement states that the turmoil caused by several industry participants like BlockFi, Celsius, Voyager, among others has impacted the whole industry. This has resulted in a major increase in withdrawals of assets from the CoinLoan platform. Therefore, as a response to the downtrend in the crypto market and increased withdrawals on the platform, the company has decided to take some proactive changes “to ensure smooth operation in the future.” It states:

“The interest we pay on the Interest Accounts is yielded by issuing overcollateralized loans to other platform users. Hence, in some instances, the estimated date of a complete withdrawal of assets from the Interest Accounts comes before, not after, loan closure.”

The effective-immediate temporary measure includes a reduction in withdrawal limit and applies to the total amount of daily withdrawals per account. CoinLoan has decided to modify the daily account withdrawal limit to $5,000.

Moreover, the company clarifies that the reduction is temporary and provisional. It states:

“We are looking forward to lifting this measure once the market situation allows it.”

Lastly, the company acknowledges the fact that many of its users might be storing all their life savings on CoinLoan and therefore it will not simply disable the withdrawals. It added:

“From a business perspective, halting all withdrawals, like some other companies have done, would be more convenient. However, our clients, the users who have entrusted us with their funds, are our biggest priority.”

CoinLoan said that it is the oldest CeFi platform on the crypto lending sector and assured the users that their assets are safe and secure.