The number of crypto lending platforms that actually let users take their crypto home with them is getting progressively smaller. One company even reported its users were draining their accounts of close to $198 million in total over the past three weeks.
CoinLoan announced Monday it was putting a big hold on users’ abilities to withdraw most of their crypto assets. That same day, Vauld essentially gave its customers a paternal pat on the head, telling them “it’s for your own good,” while it nixed withdrawals altogether. The latter company is reportedly looking for its own “Daddy Warbucks” to help the company meet the harsh, cold hell of the ongoing “crypto winter.”
CoinLoan told users on its blog it was restricting the total amount of daily withdrawals to just $5,000 in a 24-hour period in an attempt to limit the flood of withdrawals to a bare trickle. The company said it would lift the limitation “once the market situation allows it.”
It’s a near 99% reduction in the overall withdrawal limit from where it originally stood at $500,000. The company went on to pat themselves on the back for not halting all withdrawals whatsoever “like some other companies have done,” adding “the users who have entrusted us with their funds are our biggest priority.”
Crypto users are looking to abandon some ships en-mass, and companies are using cork stoppers to plug the holes in their sinking vessels. Vauld CEO Darshan Bathija wrote on the company blog that its suspension of withdrawals was due to “a combination of circumstances such as the volatile market conditions, the financial difficulties of our key business partners inevitably affecting us, and the current market climate which has led to a significant amount of customer withdrawals in excess of a $197.7 [million] since [June 12].”
The two companies join a host of other crypto platforms including Coinflex, Celsius, and Binance that have either halted or massively limited withdrawals. The Singapore-based Vault had just recently cut total staff by 30%, according to email statements from executives sent to money control. Other companies like BlockFi and Crypto.com have announced similar drastic cuts due to the price of crypto maintaining its bear market status.
Bathija wrote they were discussing moves with potential investors. Reuters reported Tuesday that the London-based crypto lending platform Nexo is thinking about buying Vauld to “accelerate its deeper presence in Asia.” There’s no word yet on how much that buyout could be worth. Reuters pointed to Indian newspaper The Hindu Business Line that previously reported the company had $1 billion in assets and wanted to break past $5 million this year.
Though even while Nexo considers expansion in the crypto realm, many bears still doubt the health of the incredibly unregulated industry. Three Arrows Capital—a huge crypto hedge fund—recently defaulted on millions in bitcoin loans and was ordered to liquidate its assets by a Virgin Island court last week. That’s not to say there isn’t big money still being pushed into some crypto projects from investing firms looking to prop up the floundering crypto market.