Yet another cryptocurrency exchange has been forced to liquidate in the wake of a devastating hack. This time, it’s Gatecoin, albeit some years after scammers stole in excess of $2 million in cryptocurrency from customer accounts.
In a notice posted to the Gatecoin website, “the Gatecoin Team” confirmed they had been forced to cease trading, following documented difficulties with an external payment service leading to “substantial losses” from which the firm is unable to recover.
According to the post, “As you may know, following our issues with our banking partners in September last year, we started working with a Payment Service Provider (“PSP”) which is a fully regulated payment institution by the French regulator. However, that PSP failed to process most of the transfers in a timely manner which in turn almost paralyzed our operation for many months and caused substantial loss on our side.”
Confirming the exchange was now no longer operational, the statement said a liquidator had been appointed to oversee the distribution of remaining assets to the exchange’s creditors.
“In light of the circumstances, we have suffered financial difficulty over a period time to an extent that we are no longer able to support our operation. On 13 March 2019, the court has granted a winding-up order against our company. A provisional liquidator has been appointed and we have to cease operation with immediate effect,” the exchange stated.
One of the original regulated crypto exchanges, Gatecoin was founded back in 2013 with a focus on Bitcoin Core (BTC) and Ethereum (ETH). At the time of the hack three years ago, the total amount stolen was worth in excess of $2 million—an amount that had rocketed to hundreds of millions at the height of the bull market in 2017.
Problems at the exchange have gone from bad to worse ever since, with a number of documented issues with payment service providers, including the freezing of its Hong Kong bank accounts. As a result, the firm has said it no longer has the resources to carry on, with no prospect of recovering the funds from the third party in time to keep their operation afloat.
The news is the latest example of a crypto exchange being brought down by malicious activity, albeit in this case aided by difficulties with payment services partners.
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