Over 75 Crypto Exchanges have disappeared in 2020
October 7, 2020 10:35 am
Not all crypto exchanges can live forever, are disappearing at a really fast pace. Over 75 crypto exchanges have shut down this year, some have been exposed as frauds, some have been the victims of hacker attacks and some have just disappeared.
There is a list of over 75 crypto exchanges, on Crypto Wisser Exchange Graveyard, listing exchanges that have died during the last few years. According to this list, five of the exchanges were labelled as scams, and four including Altsbit, and Nerae, were flagged as being hacked.
In total 31 crypto exchanges were shut down voluntarily while 34 were labelled as ‘MIA’ for disappearing with no explanation. In 2020, Dutch exchange NLexch and Chilean Chilebit were the only two flagged as being shut down by their respective governments.
Reasons for Failure
There are some macro trends which help clarify why so many smaller exchanges are collapsing.
In 2020, the growth of DeFi and the rise of decentralized exchanges have become the one more reason of failure for many smaller operations.
Regulatory pressure has also increased since the initial days of the industry, which is simply difficult for so many exchanges to keep up. Hacks and scams are also referred to as growing issues for exchanges.
The latest two high profile exchanges to have a cloud over their futures are BitMEX and KuCoin. Following the filing of criminal charges against BitMEX executives last week for banking regulation violations, crypto security firm Chainalysis has labelled the exchange as “high risk”.
The security company issued the notice to a number of its high profile clients including government agencies, banks and exchanges, notifying them that any exchange with criminal charges brought against it should be considered high risk.
According to Coin Metrics, some traders also seem wary of BitMEX’s future viability, between Sept. 30 to Oct. 3, more than $500 million worth of BTC withdrawn from the exchange.
In September, the Singapore based KuCoin exchange suffered a $200 million hack, but it has scrambled to reassure users by issuing several security updates investigating the incident to provide clarity. On Oct. 6, an official announcement was updated, as the company continues with audits into the various assets affected.
As per deadcoins.com, the user-generated content site, there are almost 2,000 altcoins and tokens that no longer exist. It proves that the Crypto exchanges are not the only entities disappearing.