The exchange attributed the difficulties in funds withdrawal to technical issues as it is currently upgrading its internal ledger system and migrating wallet addresses associated with many custodians.

News of the company’s suspension of deposits and withdrawals sparked more speculation, suggesting the exchange may be facing a liquidity crisis or, worse, have an illiquid exposure which could potentially lead to bankruptcy.

CoinList Is Not Insolvent, Illiquid, or Near Bankruptcy

However, CoinList took to Twitter on Thursday to refute the claims, noting that it is not insolvent or illiquid as people feared.

The exchange attributed the difficulties in funds withdrawal to technical issues as it is currently upgrading its internal ledger system and migrating wallet addresses associated with many custodians.

CoinList noted that the move is part of its efforts to improve its products and services to users worldwide while maintaining regulatory compliance with financial watchdogs.

The exchange also ascribed the delay in deposits and withdrawals to one of its custodian partners, which underwent maintenance that impacted certain tokens on its platform, including FLOW, ROSE MINA and CFG.

Proof of Reserves on its Way

While apologising to customers for the service outage, CoinList hinted that it plans to join the current trend in the industry that centralised exchanges (CEXs) such as Binance have adopted to prove their transparency regarding the custody of users’ assets. The move is part of efforts to rebuild the industry following the collapse of crypto giant FTX.

“Once again, this is purely a technical issue, not a liquidity crunch. We hold all user assets dollar to dollar. Regardless, this is not the quality of service we aspire to, and we apologise for the inconvenience. Proof of Reserves is on our roadmap,” the exchange said.

Other crypto exchanges such as Kraken, KuCoin, Gate.io, Poloniex, Bitget, Huobi, and OKX also plan to show evidence that they have sufficient funds in their various reserve assets to tackle emergencies to win back users’ trust after the FTX fiasco.

（By William A. Frederick）