It seems that the ongoing COVID-19 global pandemic is not doing anything for the crypto exchange businesses either. According to Crypto Wisser Exchange Graveyard, it appears that 75 crypto exchanges have closed down so far this year. Most of the reasons for this are related to hacking, scamming, or other unknown reasons, possibly linked to the Coronavirus outbreak.
In total, 31 of those exchanges were disappeared by their own volition while the other 34 of them simply vanished into thin air for no apparent reason. This year, only the crypto exchanges known as Chilean Chilebit and the Dutch NLexch were shut down by their governments.
Macro trends might actually explain part of the reason why so many small crypto exchanges seem to be disappearing this year. The increased popularity of decentralized exchanges and DeFi in 2020 has strongly affected these smaller businesses and has made them vanish one by one.
Then there is also the regulatory pressure from the authorities that has been increasing since the inception of this domain which prompted many small exchanges to simply shut down because they have not been able to keep up the pace. Moreover, the increased number of scams and hacks has also harshly affected these businesses.
Recently, a dark shadow has been floating over two larger crypto exchanges, KuCoin and BitMEX. The latter has been struggling with some recent criminal charges filings for banking regulation violations. Now, crypto security firm Chainalysis has deemed BitMEX as being a highly risky one.
Chainalysis has also issued a number of warnings to its clients concerning the crypto exchange, including government agencies, exchanges, and banks. The firm has informed them any exchanges with BitMEX will be considered high risk and that they should definitely be more careful when doing business with them.
As for the Singapore-based KuCoin exchange, in September, it has suffered a $200 million hack. The exchange has, however, reassured its clients by sending them security updates explaining the whole issue. The reason behind that move was probably to appear transparent in front of their clients and to gain their trust back. A few days ago, an update on the situation was issued and it explained that the exchange is still performing audits into the affected assets.
What’s even more interesting is the fact that crypto exchanges are not the only small businesses to disappear in high numbers this year. The website deadcoins.com has recently revealed that about 2.000 tokens and altcoins do not exist anymore.