Is this the beginning of the end for Poolin? Or is the mining pool just powering through some minor problems? The Beijing-based company recently announced, “Poolin Wallet is currently facing some liquidity problems due to recent increasing demands on withdrawals.” All hell broke loose after that and Poolin lost almost half of its hashrate, but their clients might’ve been exaggerating. Then again, they might not.
Let’s read Poolin’s exact words to get to the bottom of this.
What Does Poolin’s Announcement Actually Say?
Even though the press release appears optimistic, it doesn’t inspire confidence. Poolin announced the withdrawals freeze in the small font, while offering sweet deals to all miners that left their funds in their custody. A bad sign if we ever saw one. The announcement starts like this:
“Though Poolin mining pool services are not much affected, to serve the goal of stabilizing liquidity and operation, we are bringing the followings ZERO fee promotions and settlement adjustments.”
The promotions run from September 8th to December 7th, except for those with more than 1 BTC or 5 ETH in their balance. Those will have a full year of zero-fee promotions. The trouble starts later on, though. Buried in the text, it says:
“The payout of the current BTC and ETH balances on pool will be temporarily suspended. We will make a snapshot of the remaining BTC and ETH balances on pool on September 6th to work out the balances.”
17.6k BTC currently in the known Poolin #bitcoin wallet.
One has to wonder much is currently owed to customers? https://t.co/L677tM1lR2 pic.twitter.com/t8qivf2kW5
— Dylan LeClair (@DylanLeClair_) September 5, 2022
The mining pool is also suspending swapping and is encouraging its users to simply take their coins out in the same currency that they’re mining. Something innocuous that would’ve gone unnoticed if it wasn’t for everything else Poolin announced mixed with the current market conditions.
BTC price chart for 09/06/2022 on BinanceUS | Source: BTC/USD on TradingView.com
Possible Reasons For The Alleged Insolvency
The Poolin press release is vague and gives no reasons besides “some liquidity problems,” but their instructions are clear as day. “Withdrawals from Pool Account will be paused. Time and plans of resume will be released within 2 weeks,” the company wrote. And also promised that “the daily mined coins after September 6th will be normally paid out per day.”
All the way back in February 2021, Poolin was into defi yield farming. What could possibly go wrong??https://t.co/ZgvtNfdMSJ@officialpoolin (Ht Chet)
— Cory Swan.com (@coryklippsten) September 5, 2022
According to analyst Dylan LeClair, there are currently “17.6k BTC currently in the known Poolin bitcoin wallet.” How could a profitable mining pool with a sizable wallet get into a situation like this? This is all speculation, but the obvious theory is that they’re China-based, and the country banned bitcoin mining a long time ago. Even though the policy hasn’t been exactly successful and Poolin moved its farms to Texas, China might have found a way to stop the pool somehow.
Another possible reason has to do
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