Cryptocurrency exchange and Initial Coin Offering (ICO) platform CoinList took to Twitter to address “FUD” after a blogger tweeted that users reported being unable to withdraw funds for more than a week, sparking fears the company was experiencing liquidity problems. or would be insolvent.
“There is a lot of FUD going around that we would like to address head-on,” CoinList said in a Nov. 24 Twitter post. wire which stated that the exchange “is not insolvent, illiquid or near bankruptcy”. However, it said its deposits and withdrawals are affected by “technical issues”.
2/ We are upgrading our internal ledger systems and migrating wallet addresses involving multiple custodians.
This is one of many efforts we make to provide our customers around the world with better products and services while maintaining compliance.
— CoinList (@CoinList) November 24, 2022
Crypto-focused blogger Colin Wu had previously tweeted to his 245,000 followers that “some community members” who use CoinList have been unable to withdraw for over a week due to maintenance.
CoinList has a $35 million creditor claim against bankrupt crypto hedge fund Three Arrows Capital, which Wu said in his tweet was a “loss,” likely raising concerns that the company was insolvent or illiquid.
To temper fears of bank runs on other platforms, CoinList explained that an upgrade of its internal systems and a migration of wallet addresses involving “multiple custodians” is being undertaken.
The company cited unexplained “custodian issues” as the reason a selection of cryptocurrencies are “taking longer than expected to migrate,” with one of its unnamed custodian partners suffering an “outage.” […] not related to the migration” on November 23, which affected tokens on the platform.
The status page shows “deteriorated performance” for withdrawals, with four cryptocurrencies unavailable for withdrawal since Nov. 15, and one with delayed deposits since Nov. 16.
“Again, this is purely a technical issue, not a liquidity crisis,” said CoinList. It claimed to hold “all user assets dollar for dollar” and noted that it plans to publish its proof of reserves.
TSTIME contacted CoinList for more information, but did not receive an immediate response.
Related: FTX illustrated why banks should adopt cryptocurrency
CoinList claimed on Nov. 14 that it had no exposure to the now-bankrupt FTX exchange, but that users are increasingly nervous about centralized platforms and have rushed to ensure the safe custody of their assets, as evidenced by the surge in sales that took place in mid-November was reported by hardware wallet providers Trezor and Ledger.
Around the same time, Bitcoin (BTC) and stablecoin outflows from exchanges reached all-time highs and a corresponding uptick in activity was seen on decentralized exchanges.