Nubank and Mercadopago Suspend Crypto Withdrawals in Latam

Key Takeaways

Mercadopago and Nubank Stop Crypto Deposits and Withdrawals

Two of the largest fintech institutions in Latam announced disruptions on their crypto services on Friday afternoon.

Mercadopago, the fintech arm of Argentine e-tailer Mercadolibre, and Nubank, the largest neobank in Latam, both announced that they were halting deposits and withdrawals of digital assets due to “instability in external data providers.”

Customers trying to move cryptocurrencies using the MercadoPago app encountered a message updating them on the situation, without offering a timeline for the resolution of the incident. “Due to system instabilities, it is not possible to make cryptocurrency transfers at this time. Your deposits will be credited late. We are working to resolve,” the message stressed.

In a statement, the company disclosed that it identified “instability in crypto asset transfer operations, resulting from an incident suffered by a risk monitoring and money laundering prevention provider,” and preemptively halted withdrawals but not purchases and sales of crypto assets.

“We are following the situation in real time and will inform users as soon as operations are normalized,” it announced.

Similarly, Nubank also pinned the measure on the same instability in an external data provider, reassuring customers that the incident had nothing to do with its internal infrastructure and did not compromise customer security.

“All assets and information remain protected. The other crypto products continue to function normally,” the bank said.

The announcement sparked social media rumours of a possible attack on Paxos, which provides custody of crypto assets for the two companies. Nonetheless, the company did not issue any official reports disclosing that it had been targeted by those actors, and its status page shows no incidents registered on November 6.

The reports come as the crypto community is on high alert after several high-profile attacks on large crypto exchanges, like the one Binance experienced last month when threat actors managed to steal over $6 billion in cryptocurrency from a hot wallet.

On Monday, Mercado Bitcoin, Brazil’s largest cryptocurrency exchange, also suffered a similar attack, losing over $46 million in digital assets and vowing to compensate customers and avoid socializing the losses from the security incident. At the time, withdrawals remained suspended.