Coin Cloud has just made an announcement that is no less than a shocker for the crypto communities based in the US and Brazil.
The company has announced that it had filed for bankruptcy. It comes as a huge surprise for the cryptocurrency industry that the firm filed for bankruptcy back on January 8.
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However, the company did not reveal that it had filed for bankruptcy a month back. The cryptocurrency community is in shock in the particular countries as the firm was operating in these two countries.
Coin Cloud Announced Bankruptcy
Coin Cloud is known for being one of the largest operators of Bitcoin ATMs. The country had been operating in the United States and Brazil.
The company has confirmed that it filed for bankruptcy a month back. The company reportedly made the announcement of going bankrupt on February 8.
As per the company officials, the liabilities that they have in order are worth almost $500 million, which is a huge number.
Reason Provided by Coin Cloud
Like many other cryptocurrency exchanges, lending, and asset management firms, Coin Cloud had the same reason.
Its officials mentioned that they were badly struck with the macroeconomic conditions like the rest of the cryptocurrency industry.
However, other factors also played a major role in the firm going bankrupt. Its officials communicated that the cryptocurrency winter also played a major role in bringing the firm down to its knees.
To make things worse, the FTX exchange filed for bankruptcy. Then came other major firms such as Blockfi and Alameda Research that also went bankrupt.
It made the situation even worse for the cryptocurrency company and it had no choice but to file for bankruptcy.
Just like the firms mentioned above, Coin Cloud was rendered unprofitable as not much was coming its way.
Back in 2021, people were very excited about making investments in cryptocurrencies and using online channels to make it happen.
However, with the demise of the cryptocurrency industry in the year 2022, things became quite evident in how they would turn out for Coin Cloud.
The firm had its funds held at the FTX brand, which ended up getting them frozen as it filed for bankruptcy.
Its Largest Creditor Filed Bankruptcy As Well
The largest credit of Coin Cloud was Genesis Global Trading. It was a cryptocurrency investment subsidiary of the Digital Currency Group (DCG).
Coin Cloud officials have confirmed that being their largest creditor, DCG had the highest investment made into the company.
Following the bankruptcy, the Coin Clod platform now owes $100 million to Genesis Global Trading. The most shocking part of the loan acquisition was that the company had no collateralization for the assets it borrowed.
Then comes the second-largest creditor of Coin Cloud and the firm reportedly owes $8.5 million to Cole Kepro, the second priority one.
The executives at Coin Cloud have confirmed that they are still left with cryptocurrency assets that the creditors have deposited in their services.
The officials have confirmed that there are certain creditors who are investing a lot of money into this cause. These are about 10,000 creditors whom the company now owes somewhere between $50 million and $100 million.
Rise and Fall of Crypto ATM Adoptions
It was back in the year 2021 when the adoption rate for cryptocurrencies skyrocketed. That was the time when the adoption and usage of cryptocurrencies had become quite common.
As more people sided with using cryptocurrencies and made it clear that they would not back down from their adoption of crypto, more crypto ATMs were installed.
This is the point where Coin Cloud shined and installed several ATMs in the United States and in Brazil.
The company has continued installing more and more ATMs for cryptocurrencies and has built up an empire of 1,100 ATMs for Bitcoin worldwide.
Following the platform’s bankruptcy, all of these firms would end up filing for bankruptcy.