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This week, mining pool Poolin announced that it would be halting withdrawals for a short time
The company is the fifth largest Bitcoin mining pool, so this is no small deal
Why is Poolin halting withdrawals, and what are they doing to resolve the issue?
Bitcoin mining pool giant Poolin this week announced that it has halted all withdrawals, flash trades and internal transfers, with the company saying it needs to preserve assets and stabilise liquidity. This has left miners’ rewards locked and unable to do anything but trust the company when it says it is solvent. But what has caused Poolin to lock its funds?
Preserving Assets and Stabilising Liquidity
Poolin’s announcement of Monday was a shock to the Bitcoin mining community, with the mining pool saying that the halting of withdrawals and other operations was a vital action in “preserving assets, stabilizing liquidity, and operations in the midst of the dull crypto market”.
This already gives some idea of the problems facing Poolin, and the company gave further hints in a later update:
As you may have known, Poolin Wallet is currently facing some liquidity problems due to recent increasing demands on withdrawals. But please be assured, all user assets are safe and the company’s net worth is positive.
It’s clear then that a rash of withdrawals has been a contributory factor to the decision, as well as the general liquidity crunch that has hit the market since June following the Terra collapse. This has had a knock on effect with other platforms and, it seems, Poolin too.
Funds Are SAFU
Poolin confirmed in its later statement that “all user assets are safe and the company’s net worth is positive”, and indeed, the company is still paying out daily mined coins on a daily basis, while other coins have not been affected. It also added that it was continuing to “explore strategic alternatives with various parties.”
Poolin has mined a little over 10% of all bitcoin in the past three months, making it the fifth largest Bitcoin mining pool, underlining the importance of its decision to halt withdrawals.