- The exchange clarified that they do not have any exposure to FTX.
- They had a $35 million creditor claim on Three Arrows Capital.
- The news broke out, speculating liquidity crunch while they were having technical issues.
Cryptocurrency Exchange and ICO (Initial Coin Offering) platform CoinList had plainly denied its exposure to contagion risk and said that the FUD (Fear, Uncertainty and Doubt) regarding withdrawals on the platform is purely due to technical reasons.
They blamed the custodian issue as the main cause of the outage that has been affecting many tokens on the crypto exchange, creating a withdrawal problem. The exchange then took to Twitter to explain and clarify its stand on the matter; this happened after a blogger tweeted that users have been unable to withdraw funds for over a week now. This sparked speculation that the company was going through a liquidity crunch.
Since the FTX collapse, people have been very vigilant over the slightest error in the normal functioning of any exchange, as they want to catch early signs of any mishap that might occur in the future. It’s good to be vigilant and alert of your surrounding, but being paranoid is a whole different story.
“There is a lot of FUD going around, that we would like to address head-on.”
The exchange is “not insolvent or illiquid or near bankruptcy.”
Deposits and withdrawals are affected by technical issues.
A famous crypto blogger Colin Wu earlier tweeted that some of the community members who are using CoinList have been unable to withdraw for over a week, citing maintenance issues.
Wu, in his tweet, mentioned that CoinList had had a $35 million creditor claim on the now-bankrupt crypto hedge fund Three Arrows; this sparked a rumor of the company was facing a financial crisis and might be on the verge of bankruptcy.
Trying to salvage the situation and calm the investors and users, the exchange explained that some upgrades are ongoing in the system concerning the migration of wallet addresses, especially those involving multiple custodians. This is the reason for the delay in withdrawals.
Certain cryptocurrencies are taking longer than expected to migrate due to this custodian issue, as one of its unnamed custodian partners is suffering from an outage totally unrelated to the said migration. This is what impacts the tokens on the platform.
The status page of the exchange shows “degraded performance,” with the withdrawals of four currencies unable since November 15 and deposits unable since November 16.
“Once again this is a purely technical issue, not a liquidity crunch.” – CoinList
The exchange has claimed to hold the users’ funds dollar-for-dollar and is willing to publish Proof-of-Reserve.
The exchange clarified on November 14 itself that they have no exposure to FTX. But the collapse made users skeptical regarding the custody of their assets, and they are seemingly shifting from CEX to DEX.