The Coinquista cryptocurrency exchange has problems with liquidity

There were supposed to be programming errors that caused the crash, but then the company admitted that the funds could have been stolen. Effect? Some of the clients of the Polish cryptocurrency exchange Coinquist still cannot recover their funds. It is about millions of zlotys.

The last few months in the cryptocurrency market have been crazy. Huge increases and Bitcoin price records caused another wave of interest in cryptocurrencies. Some of them have increased their valuations tenfold in one quarter. No wonder more and more people have started to invest in digital assets.

With more traffic, however, more unexpected events occur. More scams emerge, but also a greater number of problems for legitimate businesses. For several weeks it had been rumored that it was smaller Cryptocurrency exchanges they may be in trouble because due to the sudden increase in the value of coins against fiat currencies, they have lost coverage for their activities. 

Coinquista: from developer error to theft

Is it similar in the case of the Polish cryptocurrency exchange Coinquista? This is not known, because there are contradictory messages from the company. One thing is certain: some customers cannot withdraw their money.

A representative of one of them has just reported to the editorial office of Puls Biznesu. He claims that he cannot withdraw around 5,2 from the platform Bitcoin, 55,6 Ethereum in 37,2 litecoin, which gives the value of approx. PLN 1,3 million. He has already informed about the case The Polish Financial Supervision Authority (KNF), which received an application for supervisory actions against Coinquista, which has the status of the so-called a small payment institution.

The KNF called for explanations, and Coinquista replies that, of course, he will.

Problems since January

However, the problems of the stock exchange have been going on since January this year. It was then that the first customers started reporting login problems. So they couldn't buy and sell cryptocurrencies, and also - or maybe most of all - withdraw their funds. 

The president of Coinquista, Michał Stryjewski, first assured that the break-in did not take place and that it was only a programming flaw that would be removed within two weeks. After two weeks, however, the problems were not over, and the company informed on your Facebookthat although the funds have been unblocked, work is still underway to restore the remaining functionalities. There was supposed to be a "programming investigation" because the narrative changed - the company began to allow the theft of funds. The case was supposed to be reported to the police two weeks ago, but it has not happened to this day. Why? Michał Stryjewski explains that he wants to gather more evidence. 

Today, most users can withdraw their funds, but some still do not. According to the company, it is only a few people out of over 100. cryptocurrency exchange clients. 

Or maybe they knew before?

There may be a second bottom to the matter, however. Experts have been predicting the upcoming problems of the smallest cryptocurrency exchanges for some time (Coinquista is one of them, because the daily turnover was around PLN 200). They were supposed to be caused by liquidity problems caused by a large increase in cryptocurrency prices. According to commentators, this could result in a lack of coverage in fiat currencies and liquidity problems when trying to withdraw large sums. 

Was that the case here? The company's authorities deny it, but the fact is that in August 2020, Coinquista filed with the court an application for an increase in the share capital. It was supposed to happen through the issue of series B shares for seven shareholders who were to contribute PLN 2,3 million to the company's cash register. However, on December 18, 2020, the court dismissed the application for entering the recapitalization into the National Court Register, because it turned out that it had been submitted more than 90 days after the resolution was adopted.