"We're suspending withdrawals" reads to me as "we don't have money to cover withdrawals" which implies they don't have enough liquidity or are insolvent.
Before you get too worried, it's likely more a technical problem with their wallet software than them not having the funds to spend. It seems to be that they are losing track of which inputs they have spent and which ones haven't, and everything is getting backed up behind a mound of transactions with unmet dependancies. No doubt they'll sort it out and be back to processing withdrawals again in no time.
That's obviously not what was being talked about in this context. The discussion was about being affected by suspended withdrawals if exchanges never give people their deposits back.
"The problem isn't that they don't have the money"
They didn't address that in their statement. They may not even know themselves yet how much they were taken for. With the high number of transactions that were failing in the days leading up to the withdrawal halt it's pretty clear someone was exploiting this to double withdraw something was almost certainly taken the question is how much and can they recover.
> On Wednesday, the crisis touched a high-profile crypto lender run by the billionaire twins Cameron Winklevoss and Tyler Winklevoss, forcing them to halt withdrawals from their Gemini Earn crypto lending program. ... The Gemini Earn program allowed users to deposit their coins in exchange for regular interest payments — typically at generous rates that could be as high as 8%.
The Gemini Earn page appears to redirect to this announcement:
> We are aware that Genesis Global Capital, LLC (Genesis) — the lending partner of the Earn program — has paused withdrawals and will not be able to meet customer redemptions within the service-level agreement (SLA) of 5 business days. We are working with the Genesis team to help customers redeem their funds from the Earn program as quickly as possible. We will provide more information in the coming days.
The language of this announcement is bizarre. Withdrawals are "paused," not "halted" as reported. In other words, there's a chance that Genesis will cough up the funds.
But the biggest red flag is that nothing is said about new deposits. Apparently, Team Gemini is still taking them. This is, unfortunately, par for the course with these schemes going all the way back to Mt Got. "Pause" withdrawals, but continue to allow deposits. The language of the announcement makes this look like a temporary blip that will soon be resolved. It's a tactic with a long history and an almost boringly predictable outcome.
It sounds like it's a business that has run out of its own money at exactly the wrong time. There's no customer deposits on this exchange in terms of crypto accoording to their FAQ so this is a case of "startup runs out of money", not "crypto is going to zero"
I think they might be manipulating the market. Here's my translation:
"Because people discovered that we lost or stole money, and that would destroy our operations, someone who doesn't want to be responsible for making a decision decided that we could try causing a market crash by dramatically wiping our accounts, lowering the price enough that we could buy our way back to solvency. It didn't entirely work, so we're making this announcement, which is also meant to lower the price, or if that doesn't work, allow us to segue back into operations. We will be monitoring the Bitcoin price and will react accordingly."
My take is more like "We might technically be in debt since our system recorded exchanges of now worthless crypto for other denominations, but we're going to manually go back on those orders and claims its due to system errors."
The question is here - how can they run out of liquidity in the first place? Surely as an honest exchange platform you match buyers and sellers, and take a transaction fee? This implies they have been playing games with customer deposits.
Which would be shocking for a cryptocurrency platform!
Can you explain what's funny? This is exactly what they are supposed to be holding.
The problem would be if they didn't have the shitcoins and then their customers go to withdraw. Not the fact that they actually have the exact set of shitcoins they are liable for to their customers.
Cryptopay pronounced:
"Unfortunately, our card issuer instructed us to cease all Cryptopay prepaid cards starting January 5th, 2018. All funds stored on cards are safe and will be returned to your Cryptopay accounts ASAP. Sorry for all the inconvenience caused, we’re working on the solution!"
"We're suspending withdrawals" reads to me as "we don't have money to cover withdrawals" which implies they don't have enough liquidity or are insolvent.
reply