Are EU Exchanges Viable

[Tiews]

Hello guys. I saw recently the news that DX Exchange suspended trading and its owner is looking for merger or acquisition deal. They say that the company faced some financial difficulties and this is why it cannot maintain operations anymore. Doesn't it seem to be a strange explanation? I don't believe that crypto project like DX Exchange is not able to acquire good client base and make good profits... I think that there can be more to it, and in terms of EU legislation - regulators just do not want to create a favorable climate for crypto companies. What do you think?

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[jseverson]

Doesn't it seem to be a strange explanation?

Plenty of people see it the same way, but they came to a different conclusion: exit scam lol.

Meanwhile, I don't think we can really conclude that EU based exchanges aren't viable just from this incident. There seem to be plenty of them that are doing okay. It's also possible that new exchanges in general are finding it hard to find clients because people are wary of scams.

[Wintersoldier]

EU exchanges are known in the field of Stocks, if they are implementing their procedures in a decentralized exchange through cryptocurrency, there might also fail in the beginning, but when they become used to the system on how cryptocurrency exchanges work, they can surely cope up with it through their experiences. I can say, EU exchanges are viable through experiences. But it is still preferable to run centralized exchanges as it is more regulated in cryptocurrency.

[mk4]

It really could be either. I have zero idea on EU laws and regulations, but there's a good chance that they're aware of an upcoming regulation concerning cryptocurrencies that could make operating their business a lot difficult. But at the same time, it could also be because of them not making enough money. See, I never used that exchange, but remember that cryptocurrency exchanges right now are highly competitive. A new exchange that's ran well and advertised well can easily eat out the userbase of an existing reputable exchange.

[pooya87]

running a business is not as easy as you may think and not everyone can do it successfully. many will fail to even make ends meet let alone make any kind of profit. there is a lot of costs involved in running an exchange, servers, security, labor, advertisement, ... and when the service is not popular enough it doesn't really get that much customers so the income is low and cannot cover those costs.
it is not the first business that fails in this world and it won't be the last. people tend to think bitcoin is magical and will make them super rich so some tend to jump in with their heads first and fail...

[alani123]

The viability of an exchange has nothing to do with it being based in the EU or not in my opinion. There are several long running and viable exchanges operating out of EU countries and EU citizens can have unrestricted access to them under a single regulatory framework, unlike with what happens to the U.S. In fact, if you were to question the viability of running an exchange under a certain regulatory framework, I think US would be much worse. In the case of DX, it's most likely bad internal management.

[Kyraishi]

It really could be either. I have zero idea on EU laws and regulations, but there's a good chance that they're aware of an upcoming regulation concerning cryptocurrencies that could make operating their business a lot difficult. But at the same time, it could also be because of them not making enough money. See, I never used that exchange, but remember that cryptocurrency exchanges right now are highly competitive. A new exchange that's ran well and advertised well can easily eat out the userbase of an existing reputable exchange.

I don't believe there has been any actual evidence or legislation that has been ruled for the EU community, the best thing I could find about their rules related to cryptos is this, which isn't much:

In 2015, the Court of Justice of the European Union ruled that exchanges of traditional currency for cryptocurrency should be exempt from VAT.

I don't think there's anything wrong with crypto-currencies in Europe, are they under specific rules/regulation that I am unaware of. There are a heap of exchanges available, with some below:

Eurex
NASDAQ
ICE Futures

[marcotheminer]

I would much rather trust an EU exchange than an American one, Kraken has good track record. EU is crypto friendly to say the least.

[alyssa85]

I would much rather trust an EU exchange than an American one, Kraken has good track record. EU is crypto friendly to say the least.

Kraken is not an EU exchange, it's an American exchange based in San Francisco that caters to Europeans and Canadians as well as Americans. Amazingly they have the biggest market share for bitcoin/euro trading even though they are American.

[1Referee]

Kraken is not an EU exchange, it's an American exchange based in San Francisco that caters to Europeans and Canadians as well as Americans. Amazingly they have the biggest market share for bitcoin/euro trading even though they are American.

https://data.bitcoinity.org/markets/exchanges/EUR/30d#volume_desc

Coinsbank (formerly known as Bit-X) has more reported volume than Kraken, but it reeks of artificial volume inflation;

https://bitcoinity.org/markets/bit-x/EUR (very consistent volume bar hights which generally is a sign of wash trading)
https://bitcoinity.org/markets/kraken/EUR (organic inconsistent volume bar hights)
https://bitcoinity.org/markets/bitstamp/EUR (organic inconsistent volume bar hights)

It's simply not possible to consistently keep generating roughly the same volume every single day.

[LeGaulois]

Coinsbank is known for having a high wash trading rate. The estimated real volume on the top pairs is only about 1% there. Not even comparable to Kraken. I'm not surprised to see Kraken the most used amount of Eu citizens, this exchange is a lot convenient for us and to use SEPA with. It's simple, in Europe, we use either Kraken or Bitstamp.

There are a few European exchanges, Paymium, Bitonic, Bl3p,etc and they are all viable. The thing is they can't (or just don't) offer competitive prices as others do.

[malevolent]

I don't believe there has been any actual evidence or legislation that has been ruled for the EU community, the best thing I could find about their rules related to cryptos is this, which isn't much:

By January 2020 all countries should have amended their laws to comply with the AMLD V directive. The tl;dr is like all regulations affecting the cryptocurrency sphere, this one, too, will make it more expensive to do business/make it less attractive for customers (at least for some companies). People from outside the EEA might even find themselves blocked from using EU/EEA exchanges and looks like KYC is going to be mandatory at all times (so far some small(er) exchanges were able to avoid asking for KYC for smaller transactions/volumes).

[Marckolind]

There are plenty of exchanges based in the EU. Litebit is located in The Netherlands, and has been operating for years already.

I'm not a big fan of centralized exchanges though, and prefers to trade on decentralized exchanges, such as the Blocknet DEX, which is one of many out there.

[alyssa85]

I don't believe there has been any actual evidence or legislation that has been ruled for the EU community, the best thing I could find about their rules related to cryptos is this, which isn't much:

By January 2020 all countries should have amended their laws to comply with the AMLD V directive. The tl;dr is like all regulations affecting the cryptocurrency sphere, this one, too, will make it more expensive to do business/make it less attractive for customers (at least for some companies). People from outside the EEA might even find themselves blocked from using EU/EEA exchanges and looks like KYC is going to be mandatory at all times (so far some small(er) exchanges were able to avoid asking for KYC for smaller transactions/volumes).

Does this apply to global exchanges that have european customers? Or only to European exchanges that are based and registered in Europe?

[malevolent]

Does this apply to global exchanges that have european customers? Or only to European exchanges that are based and registered in Europe?

EU/EEA (so not the whole Europe) based exchanges, and maybe other exchanges supporting SEPA bank transfers.