After a blogger tweeted that users reported being unable to withdraw funds for over a week, CoinList, a cryptocurrency exchange and initial coin offering (ICO) platform, took to Twitter to address “FUD.” This came after the blogger tweeted that the situation had raised fears the company was cash-strapped or insolvent.
A cryptocurrency-focused blogger named Colin Wu previously tweeted to his audience of 245,000 that “some members of the community” who use CoinList have been unable to withdraw for over a week due to maintenance.
The fact that CoinList has a $35 million creditor claim with defunct cryptocurrency hedge fund Three Arrows Capital, which Wu referred to in his tweet as a “loss,” likely raised concerns that the company was insolvent or illiquid.
In an effort to allay concerns that have led to bank runs on other platforms, CoinList has explained that it is in the process of upgrading its internal systems and migrating wallet addresses to “multiple custodians.”
Its status page indicates “degraded performance” for withdrawals, as four cryptocurrencies have been inaccessible for withdrawals since November 15, and one cryptocurrency has experienced delayed deposits since November 16.
According to CoinList’s statement, “Once again, this is a purely technical issue, not a liquidity crisis.”
He claimed that he owns “all user assets dollar for dollar” and mentioned that he intends to release his proof of reserves at some point in the future.
However, users are increasingly eager for centralized platforms and have been rushing to ensure safe custody of their assets, as evidenced by the spike in sales reported in mid-November by hardware wallet providers Trezor and Ledger. . CoinList stated on Nov. 14 that it had no exposure to the FTX exchange, which has since gone bankrupt.
Around the same time, the amount of Bitcoin and stablecoins being withdrawn from exchanges reached all-time highs and a concomitant increase in activity on decentralized exchanges was observed.