It is believed that 81% of Bit4You's BTC assets are stuck on CoinLoan.
Bit4You, a Belgian cryptocurrency trading platform, has ceased all operations due to an insolvency investigation into CoinLoan, one of its key partners.
The company commented on the suspension in a blog post, stating that it was a necessary measure aimed at safeguarding its users while pointing out regulatory issues faced by Estonia-based cryptocurrency loan service partner CoinLoan.
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
How to Get Free Crypto? (Explained with Animations)
In its blog post, Bit4You explained:
We would like to inform you that we recently learned that one of our major service providers, Estonia-based CoinLoan, no longer had the required registration as a custodian of virtual currencies.
Estonian regulators imposed a stop order on April 24th, preventing CoinLoan from processing or releasing assets without the approval of a designated "temporary insolvency practitioner." Therefore, CoinLoan cannot move, release, dispose of assets, or conduct transactions without appropriate authorization.
As of April 26th, Bit4You maintains that there's "no indication that virtual currencies held on behalf of our customers with CoinLoan will not be recoverable."
CoinLoan, in its blog post cited by Bit4You, asserts that it possesses the means to fulfill its obligations, with its legal team providing convincing arguments. The appointment of an interim trustee appears to be the most straightforward solution for the court, allowing an independent third party to verify the company's financial status.
The CoinLoan suspension order has locked up over 145 Bitcoin (BTC), valued at over $4 million at the time of writing, which comprises more than 81% of Bit4You's total BTC assets. Other frozen assets include 638,630 Cardano (ADA), 1,247,519 XRP, 1,097 Ether (ETH), and other tokens.
CoinLoan intends to appeal the decision but admits that it must currently comply with the Estonian court's cessation order. The situation highlights the complex regulatory environment that cryptocurrency platforms must navigate.
