2020 is proving to be a tough year for new cryptocurrency exchange projects around the world as it is reported that more than 75 such platforms have closed down their operations during the current calendar year alone.
There are various reasons behind this below-par performance of the sector despite the considerable overall growth of the cryptocurrency trading sector. The main reasons of the lot are the competitive nature of the industry, scams and hacks. The good news regarding the 75 seemingly failed crypto exchanges of the year is that many of them were in their early stages and not many of them crashed hard from profitability.
Now there is a whole website that records fallen cryptocurrency exchanges and links them accordingly and it is named Exchange Graveyard. Its website is simple and to-the-point. It mentions that not all exchanges live forever and notes that (unfortunately) some exchanges are scams, some had their funds stolen by coordinated hacks and others just disappeared over time. Immediately after this brief intro, the obituary-styled list appears with the names of the fallen exchanges. Each exchange has a small flag at the end of the name showing the country of origin and then, the time of death, cause of death and various other statistics including whether or not the exchange operated in the US itself.
In total, 31 exchanges were shut down around the world voluntarily and in a somewhat transparent manner. These platforms obviously couldn’t make their setup profitable and thus they eventually folded their businesses. This makes perfect sense as the sector is quite competitive and not every new exchange makes it here. However, 34 of these exchange were marked Missing in Action (MIA) by the Exchange Graveyard because they simply stopped operations one day with no explanation at all. Many of these are probably scams. This list will definitely increase its death toll in the future as more exchanges fail over time. Also, some new high-profile exchanges may eventually bite the dust as authorities close in around them. They include KuCoin and BitMEX with the latter facing increasing scrutiny through a legal case filed by the Commodities and Futures Trading Commission (CFTC) earlier this week.
Apart from scammed or hacked exchanges, most of the deceased exchanges have returned the funds to the users trading on them so that is a plus. These exchanges also serve as a cautionary tale for future projects and a lot can be learned from them.
Image source: pixabay.com
Don’t worry, we hate spam too
one weekly digest, just the important stuff.
