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Key Takeaways
- CoinLoan held over $8 million worth of crypto assets for Bit4You.
- CoinLoan halted user withdrawals on April 25 as it received a notice of restraint on disposition that required it to halt all user operations.
Belgian cryptocurrency lending platform Bit4YOU has announced the suspension of all its operations. This comes after one of its service providers, CoinLoan, was declared insolvent.
“We would like to inform you that we recently learned that one of our major service providers, Estonia-based CoinLoan, no longer had the required registration as a custodian of virtual currencies,” Bit4You’s blog post reads. Reasoning the decision to halt services, Bit4You stated that it was a necessary action to protect platform users amidst the regulatory action against CoinLoan.
Estonia-based crypto platform CoinLoan halted all user withdrawals and activity on April 25 as it received a notice of restraint on disposition that required it to halt all user operations, including user withdrawals, by the court.
The court order prohibits the platform from releasing, moving or disposing of assets or otherwise processing transactions without such permission. The firm recently published a message which noted that its legal team had made available sufficient documents to CoinLoan’s ability to fulfill its obligations. However, the court has appointed an interim trustee which will independently verify the firm’s financials.
In a blog post, Bit4You listed the quantities of different assets it had stored on CoinLoan. According to the blog post, the stored assets are more than 81% of the organization’s total BTC assets.CoinLoan held over $8 million worth of crypto assets for the lender.
The lender had 145.3 BTC ($4.2 million), 1097.5 ETH ($2.1 million), and 501.1 BNB ($166,000), among other tokens stored on now insolvent CoinLoan. The Belgian crypto platform further added that it has “no indication that virtual currencies held on behalf of our customers with CoinLoan will not be recoverable.”
Bit4You’s suspension is a major blow to Belgium’s crypto sector as it was the first and only cryptocurrency platform in the country.Bit4you’s suspension also highlights the need for investors to be cautious and vigilant as the crypto sector is going through a tumultuous phase.
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