CoinFLEX Follows in Celsius's footsteps Pausing Withdrawals Due to "Extreme Market Volatility"

CEO of Coinflex Mark Lamb sent a blog post "announcing that we are pausing all withdrawals" due to "extreme market conditions last week & continued uncertainty involving a counterparty." This is following in other exchanges footsteps like Celsius, who “paused” all withdrawals on June 12th. 

Lamb said they would be resuming withdrawals when the exchange is "in a better position as soon as possible." 

A user on Reddit by the handle AverageBitcoinGuy said, "How these exchanges can expect to survive, manipulating the market, is beyond me," and continued to say, "it seems there is external pressure because they (the exchanges) know this is not a great method to keep clients around."

According to FlexCOIN’s mission statement, they are focusing on Asian retail investors, as well as larger institutional players. Some users on Twitter are speculation some of their institutional clients are putting pressure on the exchange to protect themselves.

Furthermore, FlexUSD, a product by CoinFLEX, claims to be "the first interest-earning stablecoin" and is "fully backed and redeemable with USDC and pays interest 3 times a day on-chain." 

It appears investors are questioning FlexCoin's solvency, though, as a massive liquidation of the interest-yielding stablecoin has happened this morning. The coin has fallen over 15% since this morning and is not showing signs of slowing.

Lamb concluded the blog post by saying, "To confirm, the counterparty is not 3 Arrows Capital or any lending firm. We are confident that this situation can be repaired fully with a restoration of all functionality, namely withdrawals." 

The aforementioned reddit user said, “How people buy into these so called projects, and think their money is safe is beyond me. They are playing a game of hot potato with numbers on a screen that are worthless. The backbone of this movement is decentralization and if one person can shut down your entire account with a blog post, that is not decentralized.”

This appears to be another case of an exchange overextending itself and paying the price through the bear market, but it is disheartening to see investors savings affected because of it. The adage "not your keys, not your coins" seems to be still relevant.

Author: Garrett Meifert

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