Gatecoin Exchange Closes on Court Order after Payment Processor Loss
The Gatecoin exchange cited insolvency based on the loss of its payment processing partner.
The crypto world lost another exchange, as Gatecoin cited insolvency upon losses caused by its payment processing partner. The Gatecoin exchange has entered liquidation, further revealing the risk of cryptocurrency market operators after the recent hack of Cryptopia and the closing and insolvency of QuadrigaCX.
The Gatecoin exchange has now closed, replaced with a message on the insolvency of the market operator.
“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. Please rest assured that we will assist the liquidation process in order to expedite the realization and redistribution of our assets to the creditors.”
The troubles of the exchange started a few months ago, as the market operator lost its usual banking partner, and chose a French Payment Service Provider. However, the new partner failed to service the exchange’s withdrawal requests, and even held up some of the funds, creating a liquidity crisis.
Small-scale exchanges have always been in danger of being refused services by banks. In the past, Asian banks have refused to service exchanges, and in Europe, even separate traders have seen their banks refuse service and even close accounts. Cryptocurrency exchanges are still raising fears of money laundering and the potential for terrorism financing, hence the difficulty of using the traditional financial network.
Gatecoin has been riddled by problems for the past few years, including a significant Ethereum (ETH) hack, as well as a potential holdup of Ethereum Classic (ETC). The exchange also saw almost all of its volumes go down to nothing as the exchange’s reputation sank. Gatecoin saw one of its most troublesome periods in the fall of 2018 when it briefly managed to resume fiat deposits.
Gatecoin traded 89 various cryptocurrency pairs, including several small-scale tokens and niche assets, with a focus on Ethereum-based pairs.