Mining giant Poolin offers ‘fake bitcoins’ to aggrieved customers

A mini opening – The Poolin cryptocurrency mining pool is issuing IOU tokens based on Ethereum (ETH), in an attempt to reimburse its users harmed by the suspension of withdrawals on its platform.

Poolin suspends withdrawals, with a positive net worth

The facts are still hot. On September 5, Poolin announced the freezing of bitcoin and ether withdrawals on its platform, because of some liquidity problems which would be due to “the recent increase in withdrawal requests”. The company is based in Hong Kong, and it is one of the largest mining pools, appearing in the top 5 in the sector, globally.

During the suspension of withdrawals, Poolin had then mentioned measures to try to reassure its customers. It was to take “a snapshot of the remaining balances of BTC and ETH in the pool” the next day, September 6, and the cryptocurrencies mined daily were to be “paid out” every day after that date.

Poolin was also to publish a balance payment schedule. The company then assured its users that their assets were safe, and that despite these liquidity problems, ” the net worth of the company is positive “.

Poolin recently revealed the measures aimed at paying off these frozen balances. Will the technical provisions that have been decided on satisfy the expectations of users?

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In the absence of withdrawals, IOU tokens to acquire mining machines

In a communicated of September 13, Poolin informs its customers affected by the freeze on withdrawals, the distribution of IOU tokenswhich are ERC-20 tokens that can be considered IOUs.

The PoolinWallet will issue six types of tokens: IOUBTC, IOUETH, IOUUSDT, IOULTC, IOUZEC, and IOUDOGE. Each token represents for a ratio of 1:1, the cryptocurrencies associated with them. Users will therefore receive a quantity of IOU tokens equivalent to the balance of the cryptocurrencies that Poolin must reimburse them.

IOUs rather than “real” Bitcoin and Ether?

This system is supposed to “minimize the impact of the suspension of withdrawals”. Poolin ensures that IOUs can be traded on chainbe used to purchase new mining machines, acquire “shares of American Poolin companies”, and other use cases would also be revealed soon.

But despite all these technical measures and this “progress made”, the reality is much simpler: Poolin still does not seem not be able to reopen withdrawalsto allow its users to withdraw their assets.

Minors are on the list of the main victims of the current context. The crypto winter has a direct impact on their profitability and cash flow, and The Merge may be good news for the majority of cryptophiles, but certainly not for ether mining players.

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John R. Zepeda

I have extensive experience working as a content writer in the areas of cryptocurrencies and finance, where I create interesting pieces that both inform and engage their audiences.

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