75 Crypto Exchanges have shut down since this year started and hasn't even ended

[Bitcoin_Arena]

Thinking about leaving those hard-earned BTCitcoins of yours in an exchange wallet as way of;

- Storing or Holding them in there?
- Staking and Lending them out through the exchange?

Well, think again. According to Cryptowisser Exchange Graveyard, in this year alone 75 cryptocurrency exchanges have been shutdown and the year is yet to end. Who knows how many more will shut down. As of today, that's One exchange getting closed down every 3.75 Days on average.

Cointeleghaph cites that;

• Five of the exchanges were labelled as scams while four including Altsbit, and Nerae, were flagged as being hacked.
• In total 31 were shut down voluntarily while 34 just disappeared with no explanation
• Dutch exchange NLexch, and Chilean Chilebit were the only two flagged as being shut down by their respective governments in 2020

The Major reasons for the shut-downs have been blamed on;
1. Scams
2. The growing regulatory pressure, so other exchanges just decided to shut down voluntarily
3. Exchange hacks
4. The resurrection of decentralized exchanges this year due to the DeFi hype

In the light of this, I would like to echo that it's everyone's responsibility to make sure you never use an exchange as a wallet for holding their bitcoins or other coins. Chances are high that you will wake up tomorrow and the custodian of your funds is no longer operating. It doesn't matter how big or popular the exchange is. Anything can happen.

Use Noncustodial or better still, Hardware wallets to hold your funds

Source links for those who would love to read further:
- https://cointelegraph.com/news/75-crypto-exchanges-have-closed-down-so-far-in-2020
- https://www.cryptowisser.com/exchange-graveyard/

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[CryptoYar]

I think the main reason for shutting down these exchanges is decentralized finance, of course, there are some exchanges whose purpose was just to scam, although whatever it may be an attempt to save the traditional banks.

In the light of this, I would like to echo that it's everyone's responsibility to make sure you never use an exchange as a wallet for holding their bitcoins or other coins. Chances are high that you will wake up tomorrow and the custodian of your funds is no longer operating. It doesn't matter how big or popular the exchange is. Anything can happen.

Honestly, this has happened to me. Just a few days ago, when the Kucoin exchange was hacked, I had some funds that I wanted to withdraw, But then I thought that even if I have to trade here tomorrow, I will withdraw it tomorrow. And so far, withdraw option is suspended by kucoin team. my fund is stuck now.

[Twinkledoe]

I think the main reason for shutting down these exchanges is decentralized finance, of course, there are some exchanges whose purpose was just to scam, although whatever it may be an attempt to save the traditional banks.

In the light of this, I would like to echo that it's everyone's responsibility to make sure you never use an exchange as a wallet for holding their bitcoins or other coins. Chances are high that you will wake up tomorrow and the custodian of your funds is no longer operating. It doesn't matter how big or popular the exchange is. Anything can happen.

Honestly, this has happened to me. Just a few days ago, when the Kucoin exchange was hacked, I had some funds that I wanted to withdraw, But then I thought that even if I have to trade here tomorrow, I will withdraw it tomorrow. And so far, withdraw option is suspended by kucoin team. my fund is stuck now.

And considering that Kucoin is already big and known exchange, how much more risk when it comes to those small crypto exchanges? If you will leave some funds for short period, just make sure that the exchange has insurance at least, like in BNB and coinbase. Otherwise, secure your funds in your own wallets. It will not hurt if you know for sure that your funds are in your possession, at least you can sleep at night without worrying the next day that your funds may be on the hands of hackers.

[dothebeats]

This is why you don't blindly trust an exchange no matter how good the promotions are or no matter if it is promoted by some 'influencer'. Also, you don't leave substantial amounts in your exchange account, even just for a day, if you intend to continue on trading. Better to pay those small fees for transfer rather than regret it later since you have been hacked for the whole amount of your bank roll.

With the way things are going currently, even the reputable exchanges are getting closed here and there. Point still stands years after it was made: never leave your money ever on any exchange.

[joniboini]

Well, this should be expected. With how "small" crypto market compared to stocks and etc, there is no way all of those exchanges will get enough volume to survive. Not to mention some are built with the intention to exit scam. If there's no new features that you need, better stick with exchanges that are considered "safe to use" in most cases. Don't try new exchange because you want to cash out some shitcoins.

[Lucius]

It is not a big problem that some crypto exchange has stopped working - and even that number is 10 times higher - but the problem is that in some cases the owners disappear with user funds, and investigations of such crimes are very often not conducted in some countries.

This is where the intersection between decentralization and regulation comes in, as most of us are against governments interfering in our crypto anonymity, and on the other hand we want protection in the event of a hack crypto exchange or if the owner suddenly dies and takes all private keys with him to the grave. Therefore, it is important to tighten the permissions for such services - because otherwise many people will lose confidence in investing in crypto - which of course does not mean that they should use crypto exchange for long-term storage, but we all know that the vast majority have just such habits.

I think we should always remind ourselves what happened to Mt.Gox or Quadriga, and many other crypto exchanges that have marked the destinies of many people in the past decade.

[dunfida]

The Major reasons for the shut-downs have been blamed on;
1. Scams
2. The growing regulatory pressure, so other exchanges just decided to shut down voluntarily
3. Exchange hacks
4. The resurrection of decentralized exchanges this year due to the DeFi hype

Adding up:

5. There are lots of exchange or this industry is already a saturated one.
So it isnt a surprise why majority of them just disappear without any explanation and half do voluntarily closed their doors.

They wont really get sufficient liquidity for them to continue and basing off numbers then majority of us would only just recommend nor prefer on top exchangers
which had been commonly suggested.In result, those new exchange wont really get users and its just dumb to continue into that manner.

[glowing10]

This is a staggering number, and this is what we know about it. There may be some smaller exchanges which was known to very less people and thousand also be shut. Some of the exchanges may be shut because of the government or the country polices as they keep changing and making it more cumbersome for this exchange to operate. Some of them may not have a good volume to operate etc.

[SquallLeonhart]

It’s no longer something new, we talk about this all the time. Over the years we have seen lots of exchanges being hacked, and not just hacks lots of other things has been happening. Anyone that is storing their coins on an exchange by now is just doing so on purpose and should be ready to bear the consequences when it happens.

There are lots of offline/hardware/personal wallets that one can make use of to store their coins, and exchanges are no option, you should only make use of exchanges whenever you feel like trading and nothing more. I have heard of exchanges that were shutdown by governments for one purpose or the other, you can just wake up and that’s how you will lose your money for no reason.

[The Sceptical Chymist]

• In total 31 were shut down voluntarily while 34 just disappeared with no explanation

I wonder what countries those 34 exchanges were operating out of.  Any idea?

And OP, you're damn right about not using an exchange as your wallet.  That's absolutely one of the first things any newbie to crypto should learn.  I remember when I was acquiring my first bitcoin years ago, it wasn't clear to me that I shouldn't have kept coins on an exchange or in an online wallet--but I learned those things as I kept reading threads on bitcointalk.

I'm damned surprised that Yobit is still in business, and I'm wondering how long they're going to last.

[Bitcoin_Arena]

• In total 31 were shut down voluntarily while 34 just disappeared with no explanation

I wonder what countries those 34 exchanges were operating out of.  Any idea?

Here you go. Looks like there is a lot of exchange death in Netherlands, Hong Kong...

Edit:
(Oops, wrong list. These are the 31 that closed down voluntarily. I will try compiling the other 34 you requested tomorrow)

01. DFlow - Estonia
02. VirWox - Australia
03. HBUS - USA
04. Cobinhood - Cayman Islands
05. Chainrift - USA
06. Fcoin Exchange - China
07. Bitbox - Singapore
08. Trade Satoshi - UK
09. EasyRabbit - Cyprus (Rebranded to Easybit)
10. Sparkdex  - Hong Kong
11. Koineks - Turkey
12. Fisco - Japan (Merged with Zaif)
13. Bitlish - UK
14. Stellar DEX  -Unknown
15. GuldenTrader - Netherlands
16. OmniTrade -Brazil
17. BHEX - Malta (Rebranded to HBTC)
18. DEx.top - Unknown
19. Hodly - USA
20. OpenLedger DEX - Denmark
21. Bitqist - Netherlands
22. BTCEXA - Australia
23. Token.Store - Unknown
24. Nocks - Netherlands
25. Blockonix - Malta
26. ANXPRO - Hong Kong
27. Orderbook.io - Singapore
28. Instant Bitex - UK
29. Bitunio - UK
30. BOA Exchange - Romania (acquired by Bitcoin.com)
31. The PIT - Netherlands (Rebranded as Blockchain Exchange)

[Darker45]

This number is indeed surprisingly high. The breakdown is as follows:

• 5 - Scams
• 4 - Hacked
• 31 - Voluntarily shut down
• 34 - MIA; disappearing with no explanation
• 2 - Shut down by governments

*Note that the total is actually 76. The list provided by cryptowisser.com is also 76.

However, I am more interested in the overall implication of this. What does this suggest? We cannot certainly conclude that it is hard to maintain a crypto exchange because governments are inimical to their existence or operation. Out of the 76 closed exchanges, only 2 were shut down by governments.

Moreover, we cannot also claim that online threats such as hacks and other attacks played a central role because only 4 of the 76 which fell down were caused by hacks.

While I agree with the article that the rise of DeFi in 2020 could have played a major role, I disagree that the rise of DEXs in 2020 is also one macro trend which could have caused it. Which DEX in particular came and aggressively competed in the market in 2020? Was there even a huge wave of DEXs in 2020? As a matter of fact, DEXs are also included in this list.

My hunch is that many of these exchanges were part of the sudden influx of exchanges in 2016-2018, the time when thousands and thousands of tokens flocked the crypto market. Now, with so many altcoins dead and trading volumes of those which remained are terribly falling down, profits are also decreasing, definitely touching rock bottom to a lot.

Or perhaps the crypto market is too small to accommodate all of them, considering that the largest pieces of the pie are only divided among few exchange monopolies.

In other words, it must have something to do with profit, at least to many of them, which is not mentioned in the article. Operating and maintaining a crypto exchange might not be a profitable undertaking anymore that's why they are forced to voluntarily shut down. This must also explain the very high count of abandoned exchanges, those MIA. They wouldn't have been abandoned in the first place had they been providing juicy income to the owners.

[Lucius]

I'm damned surprised that Yobit is still in business, and I'm wondering how long they're going to last.

Personally, I am not at all surprised that this crypto exchange is still alive if we take into account that it is a company that is primarily related to Russia. You may not know how the system works there, but everything there is under strict control and no one operates without the approval of their various services that make sure everyone plays by their rules. So I would conclude that they are a team player with permission from the top to do what they know best.

Exchange in question also has a pretty good user base thanks to the advertising that happened on this forum, and through the acquisition of a forum that shill them in every possible ways.

[examplens]

Edit:
(Oops, wrong list. These are the 31 that closed down voluntarily. I will try compiling the other 34 you requested tomorrow)

..

For 80% of these exchanges, I have never heard of. I guess it's not a problem that there won't be any more. If most had a business as well Tradesatoshi or Cobinhood this is positive news.

is there an estimate of how much money they embezzled? I believe that there are certainly those who have money locked there.

[logfiles]

I'm damned surprised that Yobit is still in business, and I'm wondering how long they're going to last.

Not only just Yobit, the other Unpopular scam exchanges that are still operating are HitBTC and Livecoin. I have never used Livecoin but I have ever used HitBTC and Yobit before totally abandoning them. One thing I noted about both exchanges is their abnormally high withdrawal and trading fees as compared to other exchanges. So I guess they survive through those abnormal fees, and I am pretty sure their listing fees could be ridiculously high too. That, and selectively scamming people keeps them a float

[hugeblack]

The definition of the platforms needs a lot of scrutinies because many of the platforms that are added are considered a scam or have very little liquidity.
Therefore, if we take into account the platforms that can be trusted, the number will decrease to a few platforms, which we can consider as reliable.
As for keeping your money on these platforms, it is a waste of time.

The platforms are used to exchange bitcoin (from fiat or other cryptos) not holding it.

[Bitcoin_Arena]

The definition of the platforms needs a lot of scrutinies because many of the platforms that are added are considered a scam or have very little liquidity.
Therefore, if we take into account the platforms that can be trusted, the number will decrease to a few platforms, which we can consider as reliable.

The lucky few like you are me are informed about which platforms not to use but out there, we have newbies who fall prey to the scam platforms that have little liquidity, so I think it would make sense having them listed too.


@The Pharmacist, Here is the list of 34 exchanges that disappeared with no explanation. South Korea and Hong Kong seem to be leading the pack.

01. Unichange - Saint Vincent and the Grenadines
02. Crypto Dao - UK
03. BTCbear - Estonia
04. 3XBIT - Brazil
05. CredoEx - USA
06. Purcow - Hong Kong
07. CoolCoin - Australia
08. ZG.top - Mongolia
09. Coinrate - UK
10. ICOCryptex - Netherlands
11. LEOxChange - UAE
12. IDAX - Mongolia
13. TOPBTC - Australia
14. ChaoEX - Hong Kong
15. CoinMex - Belize
16. 55 Global Markets - USA
17. CoinZest - South Korea
18. CryptoDerivatives - Unknown
19. Coinfinit - South Korea
20. Nexybit - South Korea
21. South Korea - Unknown
22. BitBegin - Nigeria
23. TiDeal - Hong Kong
24. LBank - Hong Kong
25. Coinrail - South Korea
26. BitHash - Seychelles
27. QBTC - Cayman Islands
28. Efin.cx - Hong Kong
29. Bitrush - Netherlands
30. FUBT - Hong Kong
31. TokenJar - Unknown
32. CashFinex - Estonia
33. Krypto Connection - UK
34. Coinchangex - Morocco

[buwaytress]

Always suspected so but honestly didn't know it was that bad. Thought exchanges gave up in 2018 already, even DEXes stopped putting their spins out (Except all these ABV-swap platforms mushrooming up).

Just saw that on ETH alone also there's a rugpull Defi every 8/9 minutes.

And we wonder why crypto's got such a bad reputation. Outside of Bitcoin, probably deserved.

[figmentofmyass]

Always suspected so but honestly didn't know it was that bad. Thought exchanges gave up in 2018 already, even DEXes stopped putting their spins out (Except all these ABV-swap platforms mushrooming up).

to be fair, the vast majority of those are no-name exchanges with very little volume---not exactly significant. there were 5 names that i recognized: HBUS, the pit, virwox, cobinhood, and IDAX.

virwox, cobinhood, and IDAX are no surprise. virwox got hacked many years ago and never recovered. i'm surprised they were still around at all. HBUS (huobi's USA platform) never gained traction.

i was surprised to see the pit (blockchain.com's new exchange) listed, then i realized it was just rebranded to blockchain.com exchange. since re-brandings are included on the list, 75 might be an exaggeration.

[khaled0111]

Is there any stats on how many users were affected or how much money was lost with those exchanges that disappeared without warning?
I suppose the other exchanges allawed their customers to withdraw their coins before shutting down for good!
I'm not surprised by those numbers since dozens of new exchanges keep popping up out of nowhere and competing with bigger/older exchanges isn't that easy.