It’s always a sad day when an old crypto exchange shuts its doors, but Gatecoin has been on the ropes for several years now. Gatecoin was one of the first exchanges to list Ethereum trading pairs way back in 2015, but ever since a hack in 2016 the exchange has been struggling. At the time the total stolen was worth $2.14 million, a value that has catapulted to a whopping $26 million at today’s valuation. A court in Hong Kong has ordered that the exchange begins the liquidation process, paying creditors their fair share of assets.
Payment Providers Running for the Hills
The crypto industry is bustling with payment providers, but Gatecoin was struggling to build relationships with trustworthy payment service providers (PSP). In September 2018, Gatecoin had to end its relationship with its PSP after it was becoming unreliable and causing funds to go missing from the deposit and withdrawal processes. Gatecoin then decide to use an unspecified PSP, but it didn’t help the exchange’s fortunes in the end.
The Unfortunate Hack
The hack of 2016 is where everything went from for Gatecoin. Hackers made off with 15% of the exchange’s total crypto inventory, including 250 BTC and 185,000 ETH. This gave Gatecoin a bad reputation and banking partners began to back away from the exchange. After China decided to ban all ICO and fiat-crypto trading activity, things only got worse for Gatecoin. It quickly became an outsider in the crypto trading world and its trade volumes plummeted. With the onset of crypto winter, Gatecoin could no longer stay afloat and finally collapsed this week.
Exchanges Falling All Around
It isn’t just Gatecoin that’s collapsing, exchanges from all over the world are struggling and either laying off staff or shutting up shop completely. Earlier this year Liqui Exchange was forced to shut its doors after a serious downturn in trade volume, while QuadrigaCX’s CEO died, taking the platforms funds to the grave with him. Crypto winter has no doubt played a huge roll in the downfall of so many crypto exchanges, but better platform design and money management would have helped many survive.
The journey might be over for Gatecoin and its army of loyal traders, but by the looks of things everyone will get any assets stored on the platform back. It’s a huge hit for the crypto trading community as Gatecoin was a pioneer crypto exchange, but no doubt a phoenix will rise from the ashes and a new plucky crypto exchange will take its place on the trading scene.