The shutdown of cryptocurrency exchanges has been a perennial challenge in the industry, and one of the nightmares of cryptocurrency investors. Over the years, a number of exchanges have faced a dramatic shutdown including the famous MT. Gox exchange. Sadly, this continues to occur and this article will take you through three exchanges that faced dramatic shutdown in 2019.
Coinnest! yes you heard me right. Coinnest was once the third largest cryptocurrency exchange in South Korea and had won the heart of many traders with a good trust score. In April 2019, the cryptocurrency exchange announced on their website through a pop-up notice, that it would no longer accept the registration of new members starting from 16, April.
That was not enough. The company notified its users that it would no longer be In operation, and users have until 30th June 2019 to withdraw all their funds. According to reports, Coinnest has reduced the withdrawal amount as well as the withdrawal fee to allow users to meet the deadline.
The whole drama started when their CEO, Kim Ik-hwan was imprisoned and fined with $2.5 million for fraud and theft. In January 2019, the company mistakenly issued $5 million worth of cryptocurrencies as an airdrop to its users. Since then, they have been in serious financial difficulty which is the main reason for the closure.
Coinroom, a very popular polish cryptocurrency exchange staged the most dramatic shutdown or probably, an exit scam in 2019. On April 2019, users of the defunct exchange woke up with surprise emails from the coinroom customer agents, asking them to withdraw their funds within 24 hours over the termination of their contracts.
Users who could not meet the deadline were asked to issue withdrawal request through the customer agents emails, however, several of them could not retrieve their money and most of them received only a part of their funds. According to a polish news outlet, money.pl, the founder of Coinroom, Tomasz Zbigniew Wiewióra moved to Estonia to start another business.
Liqui, a cryptocurrency exchange that had been in operation since 2016 announced in January that it was shutting down. Liqui cited a lack of liquidity as the primary reason for that decision. According to them, they do not see the reason why they should continue providing liquidity for the rest of the users from an economic point of view. Users were given up to 30 days to withdraw all their funds.
Cryptocurrency exchanges have played a pivotal role in the operation of digital assets, but from the above shutdowns, it is obvious that you cannot trust them with your funds. It is always important to either consider offline wallets or make a comprehensive background check on an exchange before you work with them.