Crypto Exchange Platform CoinExchange Closes, Cites Financial Difficulties
CoinExchange is the latest crypto trading platform to announce that it is exiting the business, via a statement on its website. Unlike other cases, the crypto exchange hierarchy says the market is no longer favorable to continue operations.
CoinExchange Joins Shutdown List
In a blog post published on the platform’s website on Tuesday (October 1, 2019), CoinExchange announced its decision to shut down its service. An excerpt from the announcement reads:
“This is purely a business decision and there has not been a security breach or any other type of incident. Unfortunately, it is no longer economically viable for us to continue offering market services. The costs of providing the required level of security and support now outweigh our earnings.”
Accordingly, users can still trade on the platform until the middle of October at which time all such services will be suspended. CoinExchange will, however, allow withdrawals until the start of December 2019.
The announcement concluded by stating that the platform may come back online in the future if the market situation improves. CoinExchange declined to comment on its decision when contacted by BTCManager.
Altcoin Performance Impacting Crypto Exchanges
In late September 2019, Nova — another altcoin-focused platform, also announced its decision to close down its crypto exchange service. Like CoinExchange, Nova cited that it wasn’t shutting down because of a hack but due to worsening market conditions.
Despite some recovering in the bitcoin price in 2019, the altcoin market has seen massive declines. Even with sporadic rallies termed altseason, many altcoin tokens have seen little improvement from their 2018 lows.
Regulatory authorities in various jurisdictions continue to exert greater pressure on crypto exchanges. Platforms are now having to comply with more stringent policies like anti-money laundering (AML).
The cost of compliance also significantly increases operating overheads. For smaller exchanges, these additional expenditures might be the difference between staying afloat or being forced to shut down.
In places like India and South Korea, crypto exchanges have been forced to either exit the business or leave for friendlier climes. Meanwhile, intergovernmental agencies like the Financial Action Task Force (FATF) continue to advocate for more robust AML compliance.
As long as crypto businesses need to interface with traditional finance infrastructure, cryptocurrency commerce remains at the mercy of government regulations.