Liqui Exchange Closes Following Usage Downturn

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Liqui.io, a Ukrainian crypto exchange that opened in 2016, has been forced to close after a rapid drop in users left the platform not economically viable. The exchange introduced a number of policy changes towards the end of 2018 and invited users to accept or reject these changes. It seems that the vast majority rejected the changes and therefore effectively rendered their accounts closed, leaving Liqui without enough users, and therefore enough volume, to keep trading. On the day of the announcement, the daily trading volume on the platform was recorded at 17.5 BTC, putting it in 172nd place on CoinMarketCap’s rankings for adjusted volume.

Bear Market to Blame

Liqui broke the news by replacing the home page of their website with a note to explain that they had “decided to close all accounts and stop providing our services” following the exchange being “no longer able to provide liquidity for the Users left”. The message adds that, perhaps unsurprisingly, the downturn in the markets since 2017 is the main culprit behind their decision to close. It also comes at a time when major players such as Binance are expanding their operations and their reach, claiming more territory geographically, financially and ideologically.

Exit Scam?

Some commenters proclaimed the closure to be an exit scam, which this clearly isn’t given that Liqui are asking users to withdraw their coins, but it raises once more the concern facing investors of what a bear market can make people do. In the same way a failing business might burn down its own premises in an attempt to claim an insurance payout, a failing exchange might siphon off user funds to itself and claim a hack. This is what Canadian exchange Maplechange was accused of back in October, when they claimed they had been hacked but were able to refund all of the so-called ‘shitcoins’, but not the much more valuable BTC or LTC.
As the bear market continues it is almost certain that more exchanges will fall, but how they might choose to go about it could spell trouble for investors who still trust them with their funds.

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