Brazil is proving to be a tough market for digital currency exchanges as yet another one shuts down. XDEX has announced that it’s finally calling it quits, just one and a half year after it launched. The exchange cited regulatory uncertainty as one of the reasons for its closure.
XDEX launched 17 months ago to much fanfare and promise. At launch, it boldly claimed that it targeted bringing in 1 million users in 12 months and becoming one of the biggest players in the South American digital currencies industry. This goal has remained elusive, despite the growth of the industry in Brazil.
In its announcement, the exchange cited regulations and the tough competition as some of the reasons it has failed to find success in the market. Part of the announcement read, “For this reason, today we announce that XDEX is starting the process of closing its activities. The market projection, competition and the few regulatory advances reduced the opportunities found at the beginning of the project and were the basis for this difficult decision taken by the company.”
The exchange urged its users to close their positions and withdraw their fiat balances within the next 30 days. It will deposit the funds to the bank account registered on the trading account within one business day. For those that won’t have liquidated their assets after the 30-day period, the exchange will do it on their behalf and deposit the funds to their bank accounts in three business days.
There have been speculations about the reasons for the shutdown, with some claiming that the exchange knows more than it’s letting on. XDEX was known to be linked with XP Investimentos, a South American stock brokerage company that trades on Nasdaq. According to BeInCrypto, some of the woes facing XP may have affected the exchange. XDEX has however come out to refute these claims, stating that it no longer has any relationship with the stock broker.
As CoinGeek reported in February, Brazilian exchanges are shutting down amid new restrictive laws and heightened competition. Two exchanges, Acesso Bitcoin and Latoex shut down earlier this year after Brazil passed a law that requires them to actively report every single transaction or face hefty fines. Acesso Bitcoin’s founder stated at the time that such laws are skewed against the smaller exchanges and are pushing them out of business.
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