THE TURMOIL in the cryptocurrency market appears to have spread to Finnish companies, reports Helsingin Sanomat.
Coinmotion, the leading cryptocurrency investor in Finland, announced earlier this week it has disabled the cryptocurrency interest account service provided by Tesseract. Its customers can therefore no longer make new deposits to the service, but they can continue to request withdrawals from the service to Coinmotion.
The Finnish investment firm on Tuesday said access to the service was suspended with immediate effect to protect the interests of customers in a situation where “several virtual currency loan service providers have publicly run into difficulties”. The uncertainty in the market, it indicated, is “most likely” to continue spreading.
“While this has not directly affected Coinmotion’s operations, we are actively monitoring and investigating the effect on Coinmotion’s partners,” it said.
Tesseract raised around 21 million euros from a group of investors in mid-2021, including Finland’s Icebreaker and Taaleri. Helsingin Sanomat on Tuesday pointed out that the company has grown rapidly in recent years, with a more than tenfold surge in revenue to seven million euros seeing it post an operating profit of two million euros in 2021.
“When there’s considerable uncertainty in the crypto market, some operators want to limit their risk to the minimum,” Yichen Wu, the chief executive of Tesseract, stated to the newspaper. “Generally you can say we’ve temporarily suspended co-operation with some partners, we’re continuing as usual with some and we’re moving forward with new projects with some.”
Wu declined to specify where the company invests funds on its accounts and whether it has co-operated with the likes of FTX or Genesis.
FTX filed for bankruptcy earlier this month, leaving its estimated one million creditors faced with losses potentially in the billions. The bankruptcy filing came after a merger plan that was announced as abruptly as it was abandoned and has been followed by reports of serious mismanagement, including “unprecedented and complete failure of corporate controls”, at what was regarded as one of the most reputable exchanges in the industry.
Genesis, an American cryptocurrency lender, said at the beginning of the week it is trying to avert bankruptcy. The announcement came only a couple of days after the lender had to suspend customer redemptions due to the collapse of FTX, reported Reuters.
Aleksi Teivainen – HT