22
Crypto exchange CoinList rejected all rumors of insolvency or a lack of liquidity, calling it FUD. The exchange has been experiencing deposit and withdrawal issues.
Crypto exchange CoinList rejected all rumors of the exchange being illiquid or insolvent, tweeting on Nov. 25 that the rumors were ‘FUD.’ The exchange clarified that the issues it faced in the past two weeks were technical ones that affected deposits and withdrawals.
1/ There is a lot of FUD going around that we would like to address head on.
CoinList is not insolvent, illiquid, or near bankruptcy. We are experiencing technical issues that are affecting deposits and withdrawals.
— CoinList (@CoinList) November 24, 2022
The tweet thread covered what was happening in the backend, with the team upgrading internal LEDGER systems. It is also migrating addresses that involve multiple custodians.
CoinList clarified that custodian issues resulted in some tokens “taking longer than anticipated to migrate.” It pointed to one custodian who had an outage yesterday and concluded that it held “all user assets dollar for dollar.” It also plans to release a proof-of-reserves audit in the future.
Prior to this tweet thread, the exchange did state that a custody partner was undergoing maintenance. Some tokens that were affected include FLOW, MINA, and CFG.
Monitoring:
Our custody partner is undergoing maintenance that is taking longer than expected. During this time period deposits and withdrawals for FLOW, MINA and CFG are unavailable.
Rest assured your funds are safe. Thank you for your patience!
— CoinList Support (@CoinListSupport) November 23, 2022
CoinList has experienced a few issues since Nov. 15, with delayed deposits for ALGO and other tokens. It provided the update for the custody issue on Nov. 17, and it continues to monitor the issue.
Crypto community fears bankruptcy
While CoinList is busy attempting to assuage any concerns about insolvency, the crypto community is showing some concern. CoinList was the receiving end of $35 million when Three Arrows Capital went bankrupt.
There are some legitimate reasons for them to be concerned, as CoinList was mass deleting KYC accounts earlier in 2021. Other users saw that their accounts were also deleted, losing all access to what funds they had.
CoinList is one of the largest cryptocurrency crowdfunding platforms. Any insolvency issues would certainly have an impact on the market, though perhaps not on the scale of FTX
CoinList was valued at $1.5 billion
CoinList made tremendous headlines last year when it was valued at $1.5 billion after a $100 million funding round. Investors include Fenbushi Capital, GoldenTree Asset Management, and Alphemy Capital. Accomplice VC and Agman Partners led the funding round.
The exchange had been known for its large volumes of Wrapped Bitcoin (WBTC), setting records in 2020. While the exchange is dismissing reports of insolvency, the crypto community continues to worry and will watch it closely.
