Since this year, at least 75 cryptocurrency exchanges have been closed due to hacking, fraud, or disappearing for unknown reasons.
According to data released by Crypto Wisser, 5 exchanges were flagged as frauds, and 4 exchanges including Altsbit and Nerae were pointed out that they were closed due to the attack.
A total of 31 exchanges voluntarily closed, and 34 were marked as “MIA”-that is, they disappeared without any explanation. Dutch exchange NLexch and Chilean exchange Chilebit are the only two exchanges announced by their respective governments to close in 2020.
Some macro trends help explain why so many small exchanges are facing failures. The growth of DeFi and the rise of decentralized exchanges in 2020 have brought an end to the operations of many small exchanges.
Since the birth of the cryptocurrency industry, regulatory pressures have also increased, and many exchanges simply cannot keep up with the requirements. Hacking and fraud are also increasingly serious problems facing exchanges.
Two recent high-profile exchanges are BitMEX and KuCoin. The former was sued by the CFTC and the latter was paralyzed by a hacker attack.
Last week, BitMEX executives were charged with criminal charges for violating banking regulations, and encryption security company Chainalysis called the exchange “very high risk.”
The security company has issued warnings to many well-known customers including government agencies, banks and exchanges, informing them that any exchange involved in criminal charges should be considered high risk.
Some traders also seem to be cautious about BitMEX’s future viability. According to Coin Metrics data, between September 30 and October 3, Bitcoin worth more than $500 million was withdrawn from the exchange.
Singapore-based exchange KuCoin suffered a $200 million hack at the end of September. However, in order to ensure the safety of users, the exchange issued a series of security updates in response to the incident to provide transparency. On October 6, as the company continued to audit various assets affected, the company updated its announcement.
Cryptocurrency exchanges are not the only entity in this industry that has disappeared. According to deadcoins.com, about 2,000 altcoins and tokens no longer exist.
