Belgian cryptocurrency trading platform Bit4You has announced the suspension of operations after it discovered that CoinLoan, one of its service providers, was declared insolvent by an Estonian court.
The CoinLoan Insolvency
The cryptocurrency trading platform learned about CoinLoan’s insolvency issues on the 24th of April. According to a blog post published by the crypto lender, it learned that CoinLoan no longer had the necessary registration to qualify as a digital asset custodian. The blog post stated,
“We would like to inform you that we recently learned that one of our major service providers, CoinLoan, based in Estonia, no longer has the required registration as custodian of virtual currencies. Following this, we immediately took several steps to understand the nature and scope of this situation.”
However, Bit4you added that it does not have any reason to believe that the funds it held with CoinLoan would not be recovered.
“We were informed that a court decision of insolvency was issued against CoinLoan on Monday, the 24th of April 2023, in Estonia. However, to date, we have no indication that the virtual currencies held on behalf of our customers with CoinLoan will not be recovered, especially in view of the message published by CoinLoan on the 25th of April 2023.”
Estonian authorities issued a stop order on the 24th of April, preventing CoinLoan from releasing assets in the absence of a “temporary insolvency practitioner.” In June 2022, CoinLoan had capped withdrawals at $5000 for 24 hours in an attempt to stave off a run on its funds following the collapse of the Terra ecosystem. CoinLoan published a message to its users stating,
“A Notice of restraint on disposition received yesterday, the 24th of April, 2023, obliges CoinLoan to halt all operations for its users, including withdrawals. This action is unexpected and has an immediate effect. As a result, we have no choice but to comply with the said requirements. We are doing everything in our power to resolve this situation as quickly as possible.”
Bit4You Assets On CoinLoan
In an effort to ensure transparency and keep users in the loop, Bit4You listed out the assets and how much of them it had on CoinLoan. This includes 1097.5 ETH worth $2.1 million, 145 BTC worth $4.2 million, and 501 BNB worth around $166,00. Other assets Bit4You held on the platform include ADA, CLT, DOT, LINK, LTC, USDT, XLM, XRP, and XMR.
Bit4You assured users that it was doing everything in its power to resolve the situation without risking any funds and protecting the interest of its clients.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Source: https://cryptodaily.co.uk/2023/04/bit4you-suspends-all-activities-after-coinloan-declared-insolvent