5 Worst Cryptocurrency Exchanges of 2018

1561
5 Worst Cryptocurrency Exchanges of 2018
Advertisement
   

The past year has been a real test for projects focused on the cryptocurrency sector. Legendary investor Warren Buffett, despite his advanced years and academic approach to the selection of assets, loves to say “the tide will show who bathed without panties.” The fall in the value of cryptocurrencies and the collapse of the ICO market, which occurred in 2018, showed which of the players is able to prove themselves well in the long term. Some of the worst bitcoin exchanges in Germany, meanwhile are documented by Kryptozene. Dummy, crooks, and kings for an hour, too, became apparent. The most striking rolling stars among the cryptocurrency exchanges were these five.

Cobinhood, Taiwan

One of the most striking failures of 2018 was the Taiwanese exchange Cobinhood. A year earlier, the company raised $15 million during the ICO, promising investors to develop a Commission-free platform and actively use tokens in its work. Trusting investors become a victim of the classic pump and dump scheme: first, the quotes of tokens were artificially shaken more than 40 times (at the peak of the capitalization of this project exceeded $300 million), then followed by sobering – for the year the price fell more than 100 times, and today its cost is less than 20% of the initial price.

The exchange demonstrates complete degradation: it has changed leadership, the founders completely switched their attention to the next “fashion venture”, trying to sell the market now own blockchain Dexon, probably the hundredth in a series of such projects, which has no chance of success (but, nevertheless, again raising money, and this time already $60 million).

The quotation lists of the exchange are also very indicative: at the initial stage, the site provided a listing of almost a hundred little-known coins, allowing affiliated teams to crank out numerous “dispersals” of prices. Already in the autumn, all these fake tokens were removed from circulation without the possibility of a sale. Naive buyers were forced to stay with their illiquid assets on hand.

BitGrail, Italy

In February, the BitGrail exchange informed the community about the theft of 17 million XRB  tokens. A number of “unconfirmed transactions” involved a loss of more than $170 million. More, stolen tokens represented a significant proportion of the total quantity traded in the Nano market. Subsequently, the exchange declared bankruptcy.

Advertisement  

Francesco Firano, the owner of the exchange, said that other currencies on the accounts of the exchange, not affected. The theft, in his opinion, occurred due to an error in the blockchain of the cryptocurrency itself. In turn, representatives of Nano shared the opinion that this theft occurred due to previously undetected loopholes on the exchange itself.

Coincheck, Japan

Spring 2018, hackers infected the computers of Coincheck employees with a virus, which allowed them to commit one of the largest thefts in the crypto-currency world. The infection resulted in the theft of NEM worth more than $548 million.

Electronic security specialists found that the virus entered the system through an infected e-mail message, which has been opened by one of the employees of the exchange. Immediately after the theft, trading on the stock exchange has been stopped to find out the reasons and eliminate the security breach. Given the prevalence of cryptocurrencies in Japan, it is not surprising that more than 260 thousand investors suffered from theft.

Bithumb and Coinrail, South Korea

June 2018, was failed for Bithumb cryptocurrency exchange that lost cryptocurrency in the amount of $32 million. Damage from the attack was comparable with the capital of the organization, in addition, the scandal caused a strong reaction in media. As a result, the site had to suspend operations. The victims were promised compensation. Also, Bithumb reported quite a logical step in the protection means: it is going to move clients’ funds in a special cool electronic purse that is less vulnerable to attacks.

Previously, the Coinrail exchange was hacked, that lost ICO tokens of a number of projects, including NPXS, Aston X, as well as relatively liquid Dent and Tron in the amount of $40 million. At the same time, Coinrail didn’t tell how it intends to compensate investors.

WEX, Russia/Cyprus

Russian exchange WEX, heir of the BTC-E exchange, has carried out a powerful and multi-stage operation to withdraw funds from customers. Financial problems began in July. Later, a message appeared on various forums that Wex exchange will close soon. The original report said that “the situation got out of their control”, which was the reason for the closure of the exchange.

Further, a group of people interested in public messages, including Facebook reported that they are ready to purchase accounts on WEX in exchange for a cash payment of 20% of the current balance, while only accounts with a balance of more than 50 thousand dollars are interesting for communication. Before that, for many months, the exchange operated intermittently, allowing withdrawal only through selected channels with a Commission of more than 30% of the number of funds. The volume of customer losses on BTC-E and WEX was estimated at more than $100 million.