Cryptocurrency exchange CoinFLEXdotcom, the so-called ‘home of crypto yield’ has temporarily paused withdrawals for its users. The exchange says it is a necessary protective measure and is planning to resume withdrawals as soon as possible.
Their official webpage states that “Due to extreme market conditions last week & continued uncertainty involving a counterparty, today we are announcing that we are pausing all withdrawals. We fully expect to resume withdrawals in a better position as soon as possible. We will fully communicate with you as we find out more.”
Besides the cryptocurrency withdrawals, the exchange will be halting all FLEX Coin trading in perpetuals and spot trading.
Possible insolvency
After the pausing of withdrawals of cryptocurrency bank Celsius last week and the downfall of cryptocurrency fund 3 Arrows Capital. Several exchanges and protocols became insolvent. Making it unable for users to access their funds and showing that trust in crypto is sometimes misplaced.
What is counterparty risk in crypto?
Counterparty risk is the probability that the other party, which could be a protocol, exchange or broker, may not fulfill its part of the deal and may default on agreements. In this case the obligation of withdrawal or trading its products.
What can you do to be safe?
Do your own research! Ask yourself how legitimate the cryptocurrency party is, where you deposit your funds. This can be done by looking at our review page!
Also, if you invest in it long term. Get your coins or cryptocurrency of the exchange! Too many such cases leave investors completely rekt. Always remember, not your keys, not your crypto.
