THE UPRISING on the cryptocurrency market seems to have spread to Finnish companies, reports Helsingin Sanomat.
Coinmotion, the leading cryptocurrency investor in Finland, announced earlier this week that it has disabled the cryptocurrency interest account service provided by Tesseract. Its customers can therefore no longer make new deposits on the service, but they can still request withdrawals from the service to Coinmotion.
The Finnish investment firm said Tuesday access to the service has been suspended with immediate effect to protect customers’ interests amid a situation where “several virtual currency lending service providers have publicly gotten into trouble.” The uncertainty in the market will “most likely” continue to spread.
“While this has not directly impacted Coinmotion’s operations, we are actively monitoring and investigating the impact on Coinmotion’s partners,” it said.
Tesseract raised around 21 million euros from a group of investors including Icebreaker and Taaleri from Finland in mid-2021. Helsingin Sanomat pointed out on Tuesday that the company has grown strongly in recent years, with sales increasing more than tenfold to seven million euros and an operating profit of two million euros in 2021.
“When there is significant uncertainty in the crypto market, some operators want to keep their risk to a minimum.” Yich Wu, the managing director of Tesseract, told the newspaper. “In general, one can say that we have temporarily suspended cooperation with some partners, with some we continue as usual and with some we are pushing ahead with new projects.”
Wu declined to specify where the company keeps funds in its accounts and whether it has worked with companies like FTX or Genesis.
FTX filed for bankruptcy earlier this month, leaving its estimated one million creditors with billions of dollars in losses. The bankruptcy filing follows a merger plan that was announced as abruptly as it was abandoned, and was followed by reports of serious mismanagement, including an “unprecedented and complete failure of corporate controls” at one of the most respected exchanges in the industry.
Genesis, an American cryptocurrency lender, said earlier in the week that it was trying to avoid bankruptcy. The announcement came just days after the lender had to suspend customer redemptions due to FTX’s collapse, Reuters reported.
Aleksi Teivainen – HT