South Korea-based crypto lender Delio announced a withdrawal pause. The lender is the only domestic virtual asset deposit service to have reported to financial authorities as a virtual asset provider (VASP).
Since last year, various crypto companies crumbled down to bankruptcy after pausing withdrawals. Hence, the announcement about a company pausing withdrawals sparks panic in the community.
Delio Pauses Withdrawal Due to Haru Invest Contagion
According to Decenter, South Korean crypto lender Delio announced suspending withdrawals from June 14, 18:30. Delio claims it had to take the measures due to heightened market volatility after Haru Invest suspended deposits and withdrawals yesterday.
It is worth noting that Haru Invest is registered as VASP in the European Union (EU), while Delio is registered as VASP in South Korea. Would regulators be able to protect investors’ wealth in these jurisdictions?
Due to Delio’s withdrawal pause, the South Korean exchange Upbit limited the crypto lender’s withdrawals from the exchange.
Community: Halting Withdraw is a Death Sentence
Delio’s withdrawal pause has invited heavy criticism from the community. A community member made a sarcastic remark on Twitter:
“hEiGhTeNeD MaRkEt VoLaTiLiTy
The Market has never been this sideways, what market volatility are we talking about?”
Also, there is frustrating sentiment about Delio’s move. Last year many crypto companies such as Celsius, Voyager, Vauld, Babel Finance, and BlockFi paused withdrawals and later filed for bankruptcy.
Learn more about crypto lending platforms here.
Hence, the community believes that halting withdrawal is a death sentence. A Twitter user wrote:
“Halting withdrawals is always a death sentence. It means the exchange got washed in the volatility trading YOUR funds and now they can’t cover.”
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Source: https://beincrypto.com/delio-pauses-withdrawals-market-volatility/