Belgium’s Bit4You, the country’s only cryptocurrency lending platform, has announced that it will suspend its operations after one of its key service providers, CoinLoan, declared bankruptcy in an Estonian court. Bit4You’s statement said that CoinLoan, a crypto lending firm based in Estonia, had lost its registration as a custodian of virtual currencies. Bit4You said it had no evidence that cryptocurrencies held with CoinLoan on behalf of customers could not be recovered.
According to the statement, Bit4You customers’ investments are made up of approximately 85.66% Ripple (XRP) coins, around 81.45% of the top cryptocurrency Bitcoin, and 67.32% of Ethereum.
CoinLoan was unexpectedly ordered by an Estonian court to halt all activities, including withdrawals, on April 24. In July 2022, the company limited user withdrawals to $5,000 per 24-hour period to prevent a run on its funds.
The Bit4You platform, launched in 2018, claims to offer a user-friendly interface for individuals to trade cryptocurrencies, manage their portfolios, and invest in digital assets. It also allows customers to lend their digital currencies and earn interest in return.
The suspension of Bit4You’s activities is the latest incident highlighting the risks associated with investing in cryptocurrencies, as they are largely unregulated and their value can fluctuate dramatically. Investors are advised to exercise caution and conduct thorough research before investing in such assets.
Meanwhile, there has been a growing trend in Europe for regulators to clamp down on cryptocurrencies, with some countries imposing restrictions on trading and investing. In Belgium, the Financial Services and Markets Authority (FSMA) has issued several warnings about the risks associated with cryptocurrency investment, advising investors to be cautious and to only invest what they can afford to lose. The European Securities and Markets Authority (ESMA) has also warned investors about the potential risks associated with investing in cryptocurrencies.
