Cryptocurrency mining pool provider Poolin has suspended withdrawals from its cryptocurrency wallet service as a possible sign of serious problems within the company.
Founded in 2017, Poolin offers a mining pool with multiple cryptocurrencies, a custodian wallet, a block explorer, and a transaction accelerator. The company is backed by venture capital, which has raised $10 million from investors including Three Arrows Capital, LedgerPrime, HaskKey and Fenbushi Capital. To date, Poolin operates the fourth largest bitcoin mining pool with a hashrate share of 10.06%, according to BTC.com.
While Poolin’s mining pools for cryptocurrencies such as Bitcoin, Ethereum, Litecoin and others continue to work as usual, the same cannot be said for the Poolin wallet. In a notice to customers, the company said it was suspending all withdrawals, flash transactions and internal transfers within Poolin systems beginning Sept. 5 at 10 a.m. EDT.
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“This necessity serves our purpose to preserve assets, stabilize liquidity and operations in the midst of a dull crypto market,” the company said. “In the meantime, we continue to explore strategic alternatives with various parties.” The announcement goes on to claim that all PoolinWallet assets are safe, with more details and fixes to be provided within a week.
In a separate post, Poolin Wallet is described as “currently facing liquidity issues due to the recent surge in withdrawal requests”. In compensation, the company is not offering its customers any fees for mining Bitcoin and Ethereum from September 8 to December 7, as well as other offers for users with higher pool sales.
Any company suspending withdrawals is cause for concern and while it’s unclear how badly things are going at Poolin, a large company with liquidity problems is not a good sign, especially when it comes to clients’ money. The exact amount is unknown, but Bitcoin analyst Dylan LeClair noted on Twitter that there were 17,600 bitcoins in Pool’s bitcoin wallet, which amounts to about $155 million.
17.6k BTC currently in known pool #bitcoin wallet.
One has to wonder what is currently owed to customers? https://t.co/L677tM1lR2 pic.twitter.com/t8qivf2kW5
— Dylan LeClair 🟠 (@DylanLeClair_) September 5, 2022
Since Poolin offers mining and wallet services on multiple cryptocurrencies, the amount held by Poolin and currently unavailable to Poolin Wallet users may again be higher.
Poolin is not the first cryptocurrency industry company to suspend withdrawals this year and it won’t be the last. Cryptocurrency broker Voyager Digital Ltd. suspended admissions in July for bankruptcy, but resumed admissions. Hodlnaut and Vauld are other companies that have suspended withdrawals during the ongoing crypto winter.
Three Arrows Capital, which includes an investor in Poolin, filed for Chapter 15 bankruptcy in New York City in July after being ordered to liquidate assets in the British Virgin Islands. Cryptocurrency lending service Celsius suspended withdrawals in June, citing similar liquidity problems as Poolin.