Crypto lender CoinLoan has limited the withdrawal of funds from the platform

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Due to the difficult economic situation, the Estonian cryptocurrency lending platform CoinLoan has temporarily limited the withdrawal of assets by users to $5,000 per day.

Changes in company policy have come into force4th of July. According to the project team, the platform will return to its previous limits after the market situation stabilizes. CoinLoan maintains that customer funds are safe and the restriction decision has nothing to do with the collapse of Terra or companies that are in potential default. 

CoinLoan representatives noted that the platformhas not engaged in ether staking and its policy prohibits investments in “risky activities.” The company's decision is related to the massive withdrawal of funds by users after the default of companies such as Celsius, Voyager and BlockFi. CoinLoan explained:

"The interest we pay oninterest-bearing accounts are obtained by issuing over-collateralized loans to other users of the platform. Consequently, in some cases, the expected date of full withdrawal of assets from interest-bearing accounts is before, rather than after, loan closing.”

The project team claims that the maximumhas distanced itself from the spread of a wave of defaults among cryptocurrency hedge funds and credit institutions, and is able to protect user assets. The company considered the possibility of completely blocking funds, but it was decided to introduce only a temporary limit on withdrawals.

Not all companies were susceptible to the wavedefaults caused by the collapse of Terra. Last week, KuCoin trading platform CEO Johny Lyu denied rumors of a default and said the exchange was operating as normal without any difficulties due to the insolvency of LUNA and Three Arrows Capital.