Beleaguered crypto lender CoinLoan has announced a $147 million shortfall in assets, raising the possibility of bankruptcy. The announcement comes after the company halted customer withdrawals a few months ago.
CoinLoan said in a Wednesday notice that, as of June 5, 2023, the company holds assets valued at around 68 million euros ($72.8 million), excluding CoinLoan token CLT, distributed among 9,826 clients. On the other hand, the company’s liabilities to its clients are estimated at roughly 206 million euros ($220.7 million).
According to CoinLoan, “this amount is insufficient to fully cover all liabilities at once due to the current market conditions and unrealized loss on investment positions.”
CoinLoan Suspends Activities
CoinLoan has been facing a lot of financial trouble since the 2022 market crisis that forced several high-profile industry firms, including Three Arrows Capital (3AC), Celsius Network, and Voyager Digital to file for bankruptcy.
Previously in April 2023, CoinLoan suspended all user activity and withdrawals after receiving a notice from the Estonian Court on disposition, which mandated that it refrain from conducting any user operations without the consent of a provisional liquidator. The notice stated that the company is prohibited from disposing of any assets without prior approval from a provisional liquidator.
“The decision of the Estonian court deprived us of any opportunity to pay reasonable fees to all third-party providers (including salaries to employees and lawyer fees) without the consent of the interim trustee (we asked for it repeatedly, but all our reasonable and legit requests were either ignored or declined without any justification),” CoinLoan said.
CoinLoan Faces Bankruptcy
In its latest notice, CoinLoan stated that a court hearing is scheduled to take place at 11:00 a.m. local time on June 7, 2023, at the Harju County Court. The company said it expects to be declared bankrupt following the hearing and will accept the outcome.
“We will accept this outcome and facilitate its execution, as we have always done our best to comply with all applicable regulations and sought external professional advice when necessary,” CoinLoan said.
