CoinLoan, one of the largest crypto lending platforms has changed its withdrawal limits temporarily. In an announcement published by the company on Monday, they claimed that CoinLoan is a crypto lending business that has faced a litany of challenges and is probably the only crypto lending company that was unaffected by the controversies of Luna/UST, stETH, Three Arrows Capital, and DeFi protocol issues. This is because of the strategies adopted by the company that could endanger CoinLoaners’ funds.
However, problems with a number of crypto lending platforms, including BlockFi, Celsius, and Voyager, have disrupted the crypto market and are having an effect on the entire market. Also, the company has noticed a spike in withdrawals of assets from the platform recently. They said the company is taking this precaution to secure the future success of CoinLoan.
CoinLoan Reduces The Daily Withdrawal Threshold By 99%
The most important proactive change implemented by the company is to bring a reduction in the account withdrawal limit. This helps to balance the flows of funds and prevent liquidity-related interruptions. As per the current rule, a user can only withdraw up to $5,000 per 24-hour rolling period. The changes came into action immediately after the announcement was published on July 4th, Monday. The company tells clients this proactive step is temporary and they’ll lift it when the market allows.
Through a blog post by CoinLoan, they also said, “from a business perspective, halting all withdrawals, as 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. We understand that some of you may be storing your life savings on CoinLoan, so we cannot simply disable withdrawals. Thus, we are only lowering the limit, so you can withdraw a portion of your assets if necessary”.
According to a CoinLoan blog post, this interim preventative move is to assure robust platform operations in the future. Previous withdrawal limits were $500,000 per day and $5,000 per user. The company claimed that “the current level of liquidity was sufficient to meet all customer needs, even though halting all withdrawals would have been more convenient from a business perspective”. Following this proactive measure that reduces the daily withdrawal threshold by 99%, CoinLoan, one of the CeFi platforms founded in 2017 has joined other CeFi players such as Celsius, Vauld, and BlockFi who are struggling with liquidity issues.