Cryptocurrency CoinLoan (CLT) has collapsed and its price is down nearly 30% in the past seven days. All this because the brokerage that issued the coin, CoinLoan, has filed for bankruptcy in the Estonian court.
The head office is located in the European country, the exchange is struggling with liquidity problems and many customers can no longer withdraw amounts.
The situation worried several of the platform’s clients, as the Estonian court ordered the brokerage to stop withdrawing funds to investigate the matter, according to the brokerage itself.
However, the problem is already affecting other companies in Europe, days after a law was passed in the countries of the European bloc.
Cryptocurrency price from broker CoinLoan is melting
Data calculated by live coins at CoinGecko point out that the price of CLT is down 13% against the dollar in the past 24 hours.
For example, the listing of the cryptocurrency linked to the Estonian exchange collapsed, costing only $6.31 per unit.
If the situation continues like this, all indications are that the tender will suffer even more. The cryptocurrency has market liquidity on brokers HitBTC, Tokpie, and Bittrex.
However, once everything is cleared up and the brokerage is up and running again, the price of the coin could stabilize and maybe even rise again. Project investors remain alert to the matter.
CoinLoan has received a request to stop cryptocurrency withdrawals for customers
In the request from the authorities, published in the official Estonian magazine, everything indicates that the CoinLoan broker has gone bankrupt.
For example, CoinLoan, the country-based company, was banned from moving cryptocurrencies on its platform. That is, it cannot receive new coins from customers, nor can it withdraw funds for investors.
With the bankruptcy filing, the brokerage had suspended liquidation of assets in its name and will have to talk to the legal representative. The case actually started on April 24, 2023 and all company assets must be made available to the new person in charge.
Customers still don’t know if there is money on the platform and when they can access their cryptocurrencies.
Another Belgian exchange suspended withdrawals after CoinLoan case
The CoinLoan case draws attention as it is the first broker bankruptcy following the passage of Europe’s cryptocurrency law, MiCA.
However, the situation is even more worrying, as the demise of the Estonian platform also caused problems for bit4you, the only cryptocurrency exchange in Belgium.
In a public release, bit4you stated that it was maintaining its custody of cryptocurrencies with CoinLoan, and since the company had suspended operations, it will no longer be able to serve its customers.
With that, bit4you has suspended all its activities until it understands what is happening with the partner, saying the situation has caught management by surprise.
“In order to better protect the interests of our customers and to be fair, we have suspended the execution of operations through the platform. We will continue to take all necessary steps to protect and preserve our clients’ assets and will keep you updated on developments.”
Broker says it must appeal to the bankruptcy court
After the sketchy case in Europe, CoinLoan says the Estonian court found it easy to issue a bankruptcy judgment against the company.
In a note, the brokerage stated that the case hopes to know the reality of the company, which still has liquidity to serve clients, contrary to the allegations of official public authorities.
“Our legal team has provided sufficient arguments to prove that CoinLoan is able to meet its obligations. The appointment of the interim receiver seems to be the easiest way for the court to reach a solution, whereby an independent third party can verify the financial situation of the company. We will appeal, but we must also abide by the existing court ruling.”
Regardless, customer withdrawals remain blocked and investors on two European platforms fear losing money.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
