Announcing the decision in their official Medium blog post on June 20th, they declared the decision "due to unfavorable market conditions" and promised to reactivate the ILP once the market stabilized.
They assure users that the system will not continue to be attacked and funds are safe.
In its current state, cash withdrawals would not be eligible for IL protection. However, users who remain in the protocol will continue to receive stake and be entitled to stake IL when the protection is reactivated, the value of the full protection. The transactions of all working capital pools on the Internet are still active.
Afterwards, they added that the interim measure was to "give some space to breathe and resume protocols".
In their words:
-we've observed anomalies in the data if it wasn't for manipulation. Therefore, we are taking the bold countermeasure of temporarily suspending the IL protection protocol along with other steps to limit further exposure.
Permanent Loss Protection is Bancor's mechanism to protect liquidity providers from excessive losses while using their assets for liquidity purposes.
Some Twitter customers criticized Bancor's actions, since IL's main selling point is protection.
Meanwhile, Twitter user @MikeBurgersBurge argued that the [opposite market conditions" Bancor was referring to were Celsius` malicious conduct against Bancor, according to [2 sources." Unknown insiders said that Celsius obtained their large Bancor savings, collected Bancor (BNT) impermanent loss rewards, and then opened a short position in BNT on the FTX exchange.
