Changpeng “CZ” Zhao, co-founder and CEO of Binance, has sounded a warning to investors within the crypto space amidst the persistent pattern of paused withdrawals several crypto entities have resorted to, as the sharp volatility that characterizes the current Crypto Winter hit harder than the space can bear.
CZ advised investors against choosing exchanges that need funds to survive
CZ had taken to Twitter to comment on reports indicating that Southeast Asian cryptocurrency exchange Zipmex had paused withdrawals until further notice, citing “volatile market conditions.”
Quoting the report, CZ said, “another one bites to the dust,” further advising his followers to ensure that they make the wise choice when going for a cryptocurrency exchange. He noted that investors should steer clear of exchanges that would require the assistance of venture funds to “survive.”
Singapore-based exchange Zipmex announced that it had made the difficult decision of suspending withdrawals on its platform, citing circumstances beyond its control, including financial difficulties on the part of its key business partners.
Taking to Twitter, the Zipmex team said, “Due to a combination of circumstances beyond our control, including volatile market conditions and the resulting financial difficulties of our key business partners, to maintain the integrity of our platform, we would be pausing withdrawals until further notice.”
Amidst the wave of paused withdrawals, the community is slowly losing confidence in crypto entities
Zipmex is the latest to resort to paused withdrawals due to the cold effects of the Crypto Winter. Late last month, Crypto lender and futures exchange platform Coinflex announced that it would pause customer withdrawals due to “extreme market conditions […] and uncertainty involving a counterparty.” Users of the platform have had their funds stuck on the platform since then.
Around the time Coinflex suspended withdrawals, another exchange domiciled in India, CoinDCX decided to halt deposits and withdrawals from multiple users due to compliance and risk requirements. This came barely two weeks after crypto lending giant Celsius Network revealed on June 13 that it would halt swaps, withdrawals and transfers between accounts on its platform, citing “extreme market conditions.”.
Additionally, another Singapore-based crypto platform Vauld locked customers out of their funds by suspending withdrawals “with immediate effect,” a few days after it trimmed its workforce down by 30%. Furthermore, crypto exchange Voyager Digital took the same direction by pausing withdrawals on its platform on July 1 due to its exposure to 3AC.
The crypto community is slowly losing confidence in centralised exchanges and lending entities within the space amidst this disturbing wave. CZ’s advice appears to have come at a reasonable time, and with the Crypto Winter showing no signs of easing up, the community wonders which entity will be hit next.