12 Companies That Blocked Cryptocurrency Withdrawals Amid Market Crash


The week kicked off with Bitcoin (BTC) providing some relief to investorshaving held out at $19k and returning to the current $20k, however, the problems go far beyond the price of the cryptocurrency, with some companies hurting their clients and demonstrating the flaws in traditional systems.

In a recent survey, a Twitter user compiled a list of different cryptocurrency exchanges and platforms that have blocked customer withdrawals or pose risks to investors’ money.

According to Louis, who is CEO and CIO of Mimesis Capital, companies with “old” management models will not survive the Bitcoin era.

“Unchained is not on this list because they don’t remortgage your BTC.

Your Bitcoin stays in a multisig vault controlled by you.

The companies below are using familiar fractional reserve banking models.

Users have to trust them. And that is why they will not survive the Bitcoin era.”

Companies that block cryptocurrency withdrawals

CelsiusThree Arrows Capital (3AC)BlockFIGenesisNexusBitmexfinbloxBabel FinanceOrthogonal TradingMaple FinanceVoyagerDigitalCoinFlex

It is worth noting the companies that the user listed, some very famous and others that have already limited customer withdrawals and even blocked them completely.

Companies with limited and blocked cryptocurrency withdrawals

Listed companies make the same mistakes as banks of practicing fractional reserves. One of the reasons Bitcoin was created was to end this type of practice..

Fractional reserves represent a risk for investors’ funds because they can be lost in loans and even scams by companies, it is not the user who controls the money itself in these cases.

Among the listings, those that are directly affecting their clients are Celsius, which has paused withdrawals from its clients since June 12.

Finblox limited withdrawals to $500 per day and $1,500 per month, VoyagerDigital, who may be experiencing problems with a loan he made to 3AC, also limited withdrawals to $10,000.

Babel Financewhich has a $3 billion loan, has suspended all withdrawals and is in discussions with clients about the status of the money blocked.

Other big names also carry risks, such as exposure to other investments or loans made or taken from other entities, which can lead to situations like those described above.

Three Arrows Capital (3AC), which is linked to Voyager Digital, has already liquidated more than $400 million of its funds. The problem is that other companies are exposed, such as CoinFlexwhich recently paused withdrawals for about a week, or the Bitmexa big name in the sector.

In many cases this crisis has shown a domino effect, with the problems of Babel also affecting Orthogonal Tradingwhich has an active loan of $10 million to Babel.

On the other hand, the risk of Orthogonal Trading directly affects Maple Financewhich has a $10 million exposure to the company.

Even those who say they have no connection or exposure to other companies are also at great risk, such as Nexus and its $4.9 billion debt. The broker of Genesis it sold all its liquid guarantees and practically went bankrupt.

Not all of them with locked balances will hurt investors, but it is clear that they present great risks, similar to those of banks, which goes against much of the nature of cryptocurrencies. That is why it is always very important to know when, how and where to invest in your cryptocurrencies..

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