Crypto exchanges hit hard by liquidations, losses

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Crypto exchanges hit hard by liquidations, losses

A broad-based selloff in digital assets and the collapse of the high-profile tokens TerraUSD and Luna have had ripple effects across the industry.

A wave of liquidations triggered a fear of contagion risks. Major banks Celsius Network and Babel Finance have frozen withdrawals, and Three Arrows Capital, a major hedge fund, is facing problems that rattled investors.

The total market value of cryptocurrencies, which topped $3 trillion in November, has dropped to $957 billion, according to data from CoinGecko.

The physical futures exchange CoinFlex stopped all of its withdrawals citing extreme market conditions last week and continued uncertainty involving a counterparty, without disclosing the name. The counterparty isn't Three Arrows Capital or any lending firm, according to the firm.

CoinFlex was founded in 2019 and is a smaller exchange that focuses on derivatives trading. CoinGecko currently supports 34 crypto pairs for derivatives. One of the most vocal Bitcoin Cash advocates is Roger Ver, who is one of the most vocal investors on the exchange.

The estimated time for withdrawals from June 30 was provided by CoinFlex. A company representative didn't respond immediately to requests for comment.

Voyager Digital Ltd. limits customer withdrawals from its platform to $10,000 and 20 transactions during a 24 hour period.

The limits on its website were announced by the New York firm, which secured credit lines of $485 million from Alameda Research in the past week to shore up protection for customer assets. It disclosed exposure of about $660 million in loans to the troubled criptocurrency hedge fund Three Arrows Capital this week, sending shares plunging as analysts raised the possibility of further damage.

Voyager shares trading in Toronto have plunged 95% this year.

Nexo, a coin lender that has positioned itself as immune to the storms shaking the finance, has hired Citigroup Inc. to advise on potential acquisitions.

According to a blog post on June 22, the lender said it was seeking best-in-class advice from the bank, including on the topic of liquidity restructuring deals.

The company has frozen investor withdrawals because of an unsolicited offer to acquire assets of its competitor,Crypto. A Nexo spokesman said in an email that the offer didn't come to fruition. Citigroup didn't want to say anything.

There is no age of credibility for central banks that is over.