- Coinflex users are facing an anxious wait to see if their holdings are safe
- The platform halted withdrawals on Friday citing issues with a counterparty
- Coinflex CEO MArk Lamb gave a soft deadline of June 30th for withdrawals to resume
Users of Coinflex, the platform that offers an interest-paying stablecoin, face an anxious three-day wait to see if the platform will re-open withdrawals having halted them on Friday. The Seychelles-based company issued a statement last week to say that due to adverse market conditions and “continued uncertainty involving a counterparty”, the platform was halting all withdrawals until at least June 30th, resulting in the FLEX coin crashing 60%.
Coinflex Halted Withdrawals Three Days After Promoting its Safety
Given the recent collapse in solvency of crypto lending firms in the last week it is frankly amazing that anybody has got money left in them, but there are still clearly some Coinflex users who felt reassured when the company posted a seven-long tweet thread about how it is able to offer a safe, sustainable yield. This was seemingly meant to encourage holders to stick with the protocol, but just 72 hours later it revealed its bad news.
The terse statement from CEO Mark Lamb was troubling in its tone to say the least:
Due to extreme market conditions last week & continued uncertainty involving a counterparty, today we are announcing that we are pausing all withdrawals. We fully expect to resume withdrawals in a better position as soon as possible. We will fully communicate with you as we find out more.
Lamb added that 3 Arrows Capital wasn’t the firm in question, nor was it another lending platform, and that he was “confident that this situation can be repaired fully with a restoration of all functionality, namely withdrawals.”
The statement ended by giving an approximate date of June 30th for withdrawals to resume, but added that “these dates are estimates based on our current understanding of the situation”. Given that a whole weekend has passed, Coinflex users can expect an update either today or tomorrow at the latest.
FLEX Token Holders Hit Doubly Hard
If it manages to succeed in averting the seemingly inevitable disaster, Coinflex could count itself as the first lending platform in this mini-rout that will have pulled itself back from the brink. The statement also added that trading on the FLEX token was also being suspended on its own platform, resulting in off-platform holders rushing to sell on other exchanges. This only exacerbated the potential loss for those holding FLEX tokens on the Coinflex platform.
While it would be nice to have faith in Coinflex to turn things around, money is becoming increasingly hard to come by in the crypto space at the moment, unless you’re able to attract an FTX bailout. All this means that a “we tried our very best to carry on” blog post is much more likely than anything to the contrary.