Ripple-linked Uphold faces withdrawal delays amid ‘bank run’ claims

Crypto exchange Uphold delayed many withdrawal requests this month, spooking customers and inciting social media criticism against the Ripple–linked company. 

Uphold’s status page shows withdrawal problems beginning around November 4 and mostly resolving today. Not everyone is convinced that the problem is over, however.

The company blamed a “service disruption at our third-party transaction monitoring partner,” declining to name that partner. Uphold said the issue was also affecting “Topper and other companies across the industry.”

Protos has reached out to Uphold for comment about whether all withdrawals are processing normally but didn’t receive a reply prior to publication.

Third-party monitors currently show Uphold withdrawals as current and normal, and the Uphold website itself discloses no current outages.

One day into the service interruption, on November 5, Uphold said about 80% of crypto deposits and withdrawals were processing.

On that day, a separate crypto exchange in Japan, Coincheck, suspended crypto transfers and blamed an external outage.

By November 9, Uphold cited “an uptick on transactions needing review,” yet reiterated, “Your funds remain safe.” Customers have been complaining on the outage tracker StatusGator about withdrawal delays as recently as yesterday, November 9. 

Those claims about withdrawal delays range from a few hours to up to four days.

Within the last 20 hours, Uphold admitted that certain withdrawals were still delayed.

I’m seeing a lot of people upset with @UpholdInc because they’re having trouble accessing or withdrawing their money.

Some of these people have bills to pay and financial obligations they can’t put on hold. When people trust a platform with their money, they need to be able to…

As of 9am New York time on Tuesday, the CPO of Uphold posted, “The majority of transactions are cleared and I don’t anticipate the massive delays anymore.”

Nonetheless, claims about a supposed “bank run” circulated on social media.

The timing of Uphold’s outage lines up with an outage at Chainalysis, which announced its own address-screening shutdown on November 4 around 10:30am New York time.

This is an interesting coincidence but certainly not proof that Chainalysis is the third-party service provider involved in the withdrawal outage.

Read more: AscendEx shutdown: Uncertainty over withdrawals as hot wallets lack funds

Uphold is linked to Ripple via a liquidity partnership as well as a shared investor.

Earlier this year, New York’s Attorney General secured more than $5 million from Uphold in April for misleading investors about CredEarn.

An agreement says Uphold users lost over $34 million when Cred collapsed. 

Uphold admitted to certain factual findings in that settlement, yet it disputed the characterization, calling it “profoundly inaccurate” and emphasizing that Cred deceived Uphold, too.

A separate federal class action settlement totaling $820,000 won court approval in October 2024.

It covers users who reported unauthorized account access tied to an Uphold withdrawal issue dating back to February 2021, as well as $320,000 covered legal fees and administration costs. Uphold denies wrongdoing in that case.

On July 1 of this year, Uphold paused deposits for European customers while it completes its MiCAR licensing process. It says that European customers can still withdraw their assets during this time. 

Also in July, CoinDesk reported that Uphold cut 17% of its workforce, or approximately 85 people. The company called it a shift in focus toward enterprise business.

Separately, Uphold also said at the end of October that it’s leaving Brazil, citing authorization rules for crypto providers, with a November 30 withdrawal deadline for Brazilian customers.

In July 2022, Uphold disclosed a data breach due to its vendor Customer.io which had exposed customer email addresses. Uphold said it wasn’t hacked itself as part of that incident, with no funds were stolen.

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