Liquidity crises are spreading on cryptocurrency exchanges
The massive sell-off of digital assets and the collapse of the TerraUSD and Luna coins had strong repercussions in the cryptocurrency industry.
A wave of monetization has raised fears of spillover risks, as major crypto lenders Celsius Network and Babel Finance have frozen withdrawals, and major crypto hedge fund Three Arrows Capital faces ) Liquidity problems bothered investors.
“Bitcoin” falls between fears of recession and shaken confidence
The total market capitalization of cryptocurrencies has fallen to $957 billion from over $3 trillion in November, according to CoinGecko data.
Here are the latest developments in cryptocurrency implications.
CoinFlex for Cryptocurrency Returns Stops Withdrawals
Physical cryptocurrency futures exchange CoinFlex has cleared all withdrawals, citing "extreme market conditions", last week and "persistent third-party uncertainties," without naming it. The company said the other party is not Three Arrows Capital or any other lending company.
The smaller CoinFlex derivatives exchange was founded in 2019, and CoinGeco data indicates that it currently supports derivatives of 34 cryptocurrency pairs. The exchange's list of investors includes Roger Ver, one of the most vocal advocates of Bitcoin Cash.
CoinFlex has set a June 30 suspension period for withdrawals, and a company representative did not immediately respond to requests for comment.
Voyager Digital imposes restrictions on withdrawals
Cryptocurrency broker Voyager Digital has capped withdrawals by clients from its platform at $10,000, and 20 transactions, during a 24-hour period.
The New York-based company that secured $485 million in loans last week from Alameda Research to enhance protection of clients' assets, announced the restrictions on its website. The company secured the funding after disclosing its exposure to crypto hedge fund Three Arrows Capital.
This week, the company disclosed the exposure of about $660 million in loans to its battered hedge fund, Three Arrows Capital, sending shares down after analysts announced the possibility of more damage.
Shares of Voyager, which is traded in Toronto, are down 95 percent this year.
Cryptocurrency lender Nexo contacts Citigroup regarding possible acquisition
Crypto lender Nexo, which considers itself insured from the jolts of decentralized finance, said it has hired Citigroup to advise on potential acquisitions.
In a June 22 blog post, the lender said it was seeking the best advice from the bank, including on "liquidity restructuring" deals.
'Turbulent' crypto-lending platform asks for time to stabilize
Nexo made an unsolicited offer to acquire the assets of rival Celsius, which froze the withdrawals. A spokesperson for Nexo said in an email that the offer "did not come to fruition", and Citigroup declined to comment.
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