CoinFLEX shocked cryptocurrency fans when it announced that it would be freezing withdrawals for some time. In fact, the company could not specify when the reopening would take place. All it could do was plead with users to understand that the company was facing certain problems that needed urgent sorting out. For users, however, it is a big blow, from http://bitqt-app.com/ site that the shocking reaction will disappear. Even crypto marketplaces are already victims of drastic volatility and caught in a bearish trend.
What is a Crypto Withdrawal?
It refers to a monetary transaction, involving cryptocurrencies. Here, you transfer the balance of the existing platform, to a crypto wallet in an external location. This wallet is under your control. It could be a Trezor wallet, a Ledger, etc.
The transfer takes place via the concerning blockchain. Therefore, it is an on-chain transaction. This kind of exchange is different from that of a P2P (peer-to-peer) one, although the P2P transaction is also an off-chain one. Similarly, the exchange ensures that the transaction is updated on the internal ledger, despite no actual transfer being made on the blockchain.
How does a withdrawal take place?
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Suppose, you wish to transfer your crypto holdings out of the X exchange. Utilize the app to reach the crypto section. The next step to take is to tap on ‘send’. This ‘send’ is attached to the desired digital currency. Tapping on ‘wallets’, displays the list of crypto addresses.
Note that it is not possible to reverse a withdrawal, once it has been executed.
An Introduction to CoinFLEX
Launched in 2019, CoinFLEX is a spin-off from Coinfloor. Coinfloor refers to a long-standing crypto exchange in the UK. CoinFLEX is a Bitcoin futures exchange. It also carries the label of the world’s first physically established digital currency exchange. Another claim to fame is the initiation of the first digital currency interest rate markets. Finally, CoinFLEX has been responsible for launching the longest-dated futures marketplaces.
The current head of CoinFLEX is Mark Lamb. He is both, CEO, and co-founder. The company was founded in Seychelles. However, it has a team that takes care of global matters, based in Hong Kong. The establishment caters to clients across the globe, offering over 25 diverse digital currencies. These cryptos are available in the repo, futures, and spot marketplaces.
Despite being a small organization in comparison to so many others, CoinFLEX has managed to garner a significant group of fans. Big names have adopted the roles of investors and shareholders. They include Dragonfly-Capital Partners, B2C2, Trading Technologies, etc.
Reasons for Closure of Withdrawals
The announcement regarding the closure of withdrawals appeared on diverse social media platforms. It was also displayed on the websites and apps of various digital currency exchanges. An additional announcement was that there would be no trading with FLEX, the native token of CoinFLEX. However, the halt would only be for a temporary period.
What could be the reasons behind this sudden decision to cease all withdrawals?
A possible reason could be potential issues arising out of liquidity. However, CoinFLEX is not the only organization to face this problem. Several medium-sized and smaller crypto exchanges are experiencing the same. Some are even considering becoming possible victims of insolvency. It is because of the reduction in transactions and the bearish sentiments prevailing in the marketplace. Examples of such establishments are lending ones, such as Voyager, Celsius, etc.
Another reason that is making the rounds is the question of uncertainty prevailing around a specific counterparty. Some have even speculated that this counterparty could be 3 Arrow Capital, or some other lending firm. However, CoinFLEX has clarified that this is not true.
Other crypto organizations have been going in for massive downsizing, stating that potential insolvency is making them apprehensive. Even the current conditions in the crypto marketplaces, including volatility, are making people jittery.
However, CoinFLEX’s CEO is not interested in taking this drastic step. Instead, the company wishes to resolve all issues as quickly as possible. This way, it will be possible to restart all operations across the platform, equally quickly. Towards this end, the organization had given itself time until the end of June 2022, for getting everything into place again. Probably, another date has been fixed, because there have been no new announcements so far.
