Several crypto platforms froze withdrawals this summer. Which have restored account access to their users?
In recent months, several cryptocurrency lending companies and other services have suspended payouts and frozen customer balances.
These companies began to suffer from low liquidity when bitcoin prices plummeted to near $20,000 levels in June. In order to become solvent again, every company was forced to repay its investments or look for new financing methods.
Not every company has managed to remain solvent, some have filed for bankruptcy or initiated reorganization proceedings. Still, many companies try to pay users back through a recovery plan.
Below is the status of crypto companies that have stopped paying out.
Babel Finance suspended withdrawals on June 17th. The company is estimated to have lost as much as $225 million on its investments.
According to Bloomberg, the company plans to raise funds as part of its restructuring plan. Babel Finance intends to raise US$250-300 million through convertible bonds and maintain a US$200 million revolving credit facility.
Additionally, the company hasn’t announced any concrete plans to allow customers to withdraw funds from their account balances.
On June 12, Celsius was one of the first companies to suspend payouts. During its bankruptcy hearing in July, the company presented a restructuring plan that would see it raise funds through asset sales, mining operations and fundraising.
Under Celsius’ proposed recovery plan, users can withdraw their balance in cash at a discount or make a long-term investment.
However, Celsius hasn’t announced a definitive process for users to get their funds back, and withdrawals on the platform remain closed as of August 10.
CoinFLEX suspended payouts on June 23 and has so far managed to avoid filing for bankruptcy. It began restarting withdrawals in mid-July, at which point it allowed users to withdraw up to 10% of their balance.
To continue to recover, CoinFLEX plans to raise funds by selling a recovery token, seeking investors and finding depositors willing to exchange deposits for equity.
CoinFLEX is also entering arbitration proceedings in Hong Kong with crypto entrepreneur Roger Ver, who allegedly owes the company up to $84 million.
Hodlnaut is the latest crypto lender to suspend withdrawals. The Singapore-based company announced its decision to suspend its services on August 8.
The company added that it will stop swaps and deposits as well as withdrawals. Additionally, it will withdraw an application from the Monetary Authority of Singapore (MAS) that would have offered token payment services.
Hodlnaut said there will be an update on August 19, but there’s no indication it will resume payouts and other services on that date.
Nuri, formerly known as Bitwala, filed for bankruptcy on August 9th. The exchange plans to keep withdrawals and most other features open despite this decision. However, the exchange does not allow new accounts to be opened, nor does it accept new customers.
Vauld suspended withdrawals on July 4th. Since then, it has filed for bankruptcy protection under bankruptcy law, although it has not actually filed for bankruptcy.
Vauld is reportedly discussing restructuring options that would help it remain operational. In addition, the company has been evaluating the possibility of a takeover by Nexo since July, although the transaction has not yet been confirmed.
Additionally, Vauld hasn’t announced any concrete plans to return funds to its users.
Voyager Digital suspended trading on July 1 and filed for bankruptcy on July 6. However, the bankruptcy proceedings have gone well and the company has received court approval, allowing it to return funds to customers.
Although it is debatable whether the company will be able to fully compensate users, Voyager Digital has put in place a clear plan for users to recover funds.
The company is now eligible to repay $270 million to customers through special accounts with the Metropolitan Commercial Bank beginning Thursday, August 11.
Zipmex froze withdrawals on July 20th. It later filed for a series of bankruptcy protection moratoria on July 29 without filing for bankruptcy.
The company began opening withdrawals for Solana (SOL), Ripple’s XRP, and Cardano (ADA) during the week of August 2nd. Starting August 11, users will be able to withdraw Ethereum (ETH) from the platform’s Z wallet. Starting August 16, users will be able to withdraw Bitcoin (BTC) from the same wallet.
Zipmex says it is working to organize the return of Babel Finance assets. It also says it is involved in “advanced fundraising talks” and has received an additional investment in its ZMX token from an investor.
Disclaimer: The information contained herein is provided without regard to your personal circumstances and therefore should not be construed as financial advice, investment recommendation or an offer or solicitation to engage in transactions in cryptocurrencies.