A deadline not very fair play – 2022 is far from being a boom year for Crypto.com at the moment. The cryptocurrency exchange had indeed started the year with a hack of more than 34 million dollars in Bitcoin and Ether. Another news is now shaking some users of the platform. The latter must indeed repay their crypto loans by mid-March 2022, and we cannot say that Crypto.com really leaves them the choice.
Crypto.com has sent an email to its users affected by the restrictions related to its lending program, informing them that they have until March 15, 2022 to repay their cryptocurrency loans. The list of countries affected by the restrictions has been updated and now includes the United States, United Kingdom and 38 other countries.
The guarantees of users who do not repay their loans by this deadline imposed by the platform, will simply be liquidated. The affected loans will be closed by Crypto.com.
How to explain this decision of the stock exchange, which penalizes its users? Some Crypto.com customers believe the company is suffering from a financial standpoint, the backlash of its major marketing efforts.
The year 2021 was indeed marked for Crypto.com, by its prestigious partnerships with sports giants, collaborations which amount to tens of millions of dollars. However, Crypto.com has not raised amounts as large as the other unicorns, which raises questions about the company’s ability to finance all its ambitions.
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” Prevention is better than cure “
Of course, these theories do not necessarily reflect reality. This decision by Crypto.com regarding the repayment of cryptocurrency loans could also be motivated by reasons that have nothing to do with its financial situation.
We must also consider the regulatory context of crypto loans. Cryptocurrency loan products are in the sights of regulators for more than a year. The American SEC thus investigated in January 2022 the loan products of Gemini and Celsius.
In February 2022, BlockFi was fined $100 million for unregistered crypto lending products.
It could therefore be that Crypto.com has simply decided to take these measures to end its crypto loan program in countries where the regulation is particularly fussy about this type of product, in order to avoid managing disputes with the regulators.
The SEC had successfully dissuaded Coinbase from launching its Lend loan program. Has this admission of the stock market’s weakness in the face of the regulator deeply marked the minds of the leaders of other exchanges, so much so that the cryptocurrency exchanges now want to avoid going to war on this ground at all costs?
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