Hacks, regulations, scams, lead 70+ exchange shut down in 2020

2020 has not been the best year for cryptocurrency exchanges, with over 70 shutting down in the first nine months of the year. Some of the exchanges have been exposed as frauds, some have been the unfortunate victims of cyber-attacks and others have just disappeared mysteriously.

According to Crypto Wisser, 76 exchanges have closed down since the beginning of 2020. Worryingly, according to the website’s Exchange Graveyard list, the biggest number of exchanges has ‘just disappeared’ without an explanation. They include TokenJar, Bitrush, QBTC, Nexybit, Coinfinit, ChaoEX, CoinMex, Coinrate, CoolCoin, BTCBear, Unichange and 3XBit.

The second biggest reason for the shutdowns was voluntary closure which claimed just over 30 exchanges. They included Bitunio, Blockonix, Bitqist, BHEX, OmniTrade and Stellar DEX.

HBUS is also listed under voluntary closure. The exchange was the U.S. affiliate of the global exchange giant Huobi Group. In December 2019, HBUS announced that it was ceasing operations “so that it can return in a more integrated and impactful fashion.” The shutdown came barely a month after Huobi froze U.S customer accounts, citing regulations as a challenge.

Indeed, regulations have played a big part in how the digital currency exchange industry has shaped up in 2020. As per the list, two exchanges were directly shut down by their respective governments—Nlexch in the Netherlands and Chilebit in Chile.

While only these two were shut down directly, most of those which shut down voluntarily did so due to increasing regulatory pressure. Gone are the days of the digital currency wild west, with regulators now taking a keen interest in the industry.

During the CoinGeek Live conference earlier this month, regulations and compliance was one of the key topics, with a number of speakers urging service providers to shape up or risk being forced out of the market by their respective regulators. As Centbee cofounder Angus Brown stated, “The light of regulations will drive the shadows to the corners.”

The Exchange Graveyard list does however list a few exchanges that are still operational as dead. One of these is LBank; an exchange which Crypto Wisser claims is inaccessible. However, both CoinMarketCap and CoinGecko list the exchange as active, with the latter showing that LBank recorded $134 million in the past 24 hours in trading volume. The dead exchanges list also includes TopBTC, an exchange that processed $670 million in trading volume in the past 24 hours as per CoinGecko.

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