Bit4You Stopped Working After CoinLoan Insolvency
- Bit4You has halted all activities, including withdrawals, due to the bankruptcy of one of its main partners.
- On April 24, an Estonian court suddenly ordered CoinLoan to cease all activities, including withdrawals.
- CoinLoan is also no longer necessary to register as an exchange custodian of virtual currency.
Bit4You, a Belgian crypto lending platform, has ceased operations after one of its service providers, CoinLoan, was ruled insolvent by an Estonian court.
Bit4You discovered CoinLoan’s bankruptcy on April 24, and the lender no longer has the essential registration as a digital asset custodian, according to a blog post published on Wednesday.
“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.”
According to the statement, CoinLoan controls around 85.66% of Ripple (XRP) coin, approximately 81.45% of Bitcoin, and 67.32% of Ethereum.
Estonian regulatory authorities issued a stop order, preventing CoinLoan from processing or distributing assets without the explicit authorization of a temporary insolvency practitioner. This prevents the platform from transferring, releasing, or disposing of assets or from otherwise completing transactions until such approval is obtained.
There has been no indication that the monies held by CoinLoan would not be retrieved, according to Bit4You. According to a CoinLoan blog post quoted by the Bit4You team in their release, the firm thinks it can satisfy its obligations:
“Our legal team has provided sufficient arguments to prove CoinLoan’s ability to fulfill its obligations. The appointment of the interim trustee seems to be the easiest way for the court to find a solution by letting an independent third party verify the financial situation of the company.”
According to the article, the Estonian court’s move was unexpected and would have an immediate impact. To prevent a run on its cash, the business restricted customer withdrawals in July 2022 to $5,000 every 24-hour period.
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