Spanish exchange 2gether shutdown over market crash

[Accardo]

The current situation of cryptocurrency market is disturbing to cryptocurrency traders, investors and users but, affected exchanges are taking cold decisions. Recently, 2gether just sent an email across their users that says;

After five years of serving the crypto community, we are forced to close the private account service. The lack of resources and the crypto winter prevent us from providing the service with the quality and guarantees [with which] other nearby providers are doing it.

This action affected about 100,000 users that trusted the service of this exchange. And, their funds are held on the exchange. They went further to urge users to pay a fine of $20.35 to keep their accounts active, and failure to comply will get such account suspended. ( Maybe they'll be back in future)

Though the Spanish Financial users association is about to take a legal action in the name of all the users of the exchange. And, such situations will give regulators a better reason to regulate cryptocurrency. Exchanges are getting hurt during the bear market, why can't they hold? or maybe borrow some funds to finance their exchange while waiting for the market to correct.

https://news.bitcoin.com/spanish-exchange-2gether-blocks-operations-affecting-100000-users/

[1714234058]

1714234058

[1714234058]

1714234058

[1714234058]

1714234058

[1714234058]

1714234058

[1714234058]

1714234058

[stompix]

This action affected about 100,000 users that trusted the service of this exchange. And, their funds are held on the exchange. They went further to urge users to pay a fine of $20.35 to keep their accounts active, and failure to comply will get such account suspended. ( Maybe they'll be back in future)

This is robbery, pay 20 euros or have your account closed and funds confiscated?
Where the hell do these guys think they are operating, Bartovia?

The platform had already made headlines in August 2020 after suffering a cyberattack that ended with the theft of 114  bitcoins  and 276 ethers,  equivalent to 1,183 million euros in cryptocurrencies  at the exchange rate at that time. At that time,  it did not have the necessary funds to cover what was stolen  from its clients' accounts, so in January 2021, the startup managed to raise 1.5 million euros in a financing round, an amount that was used to reinforce the security of the company and its coverage model, as well as to replace the stolen funds.

Another website is mentioning something even more interesting:

Since 2017 the company has received different rounds of financing. As detailed in its 2020 accounts, 2gether had short- and long-term debts amounting to 3.14 million euros. The platform obtained 200,000 euros of financing from Lanzadera, the accelerator created by Juan Roig. It also obtained one million euros from Cecabank, through a convertible participatory loan. From Cecabank they point out that the exposure they have on the platform is reduced and that it is provisioned as it is an “extremely prudent environment”. It also received funding from the Ministry of Science (286,000 euros) and Abanca (300,000).

So basically in all their existence, all that has done was to burn through investors' funds and grants and now they are trying to use customers' funds to keep the sinking boat from becoming a full-fledge submarine.

Exchanges are getting hurt during the bear market, why can't they hold? or maybe borrow some funds to finance their exchange while waiting for the market to correct.

Exchanges make money out of trades, if there are no trades there is no income, if you pay yourself outrageous salaries, advertising, and office rents way over your income you go bankrupt, and that applies to bullish seasons too. Just because your business is based on crypto and bitcoin is a long-term profitable investment it doesn't mean your business will be too. Bullion Direct went bankrupt despite all it had to do was reselling precious metals at a profit, yet they've failed at doing so.

[The Cryptovator]

Fucking exchange, I hear the name first time. This is why should avoid low Liquidity exchange always. As far as I know, a lot of exchange doesn't have many real users and they just show volume by Market Making (MM) service. On the other hand, the MM account is out of trading fees. So that's how they won't survive long unless managing real Liquidity. I don't like to use low Liquidity exchanges and never think to use the new exchange. Asking money to keep the account active is ridiculous.

[PX-Z]

Fucking exchange, I hear the name first time. This is why should avoid low Liquidity exchange always.As far as I know, a lot of exchange doesn't have many real users and they just show volume by Market Making (MM) service

It's a local exchange and open only for locals of spain (probably) is one of the reasons why its not known worldwide.

Although, i'm reluctant od what you said "exchanges doesnt have many real users" when you can't see any of their records/database of registered/kyc-ed users.

But, yeah, the asking of fees is just Bitstamp lately, asking fees like its a subscription based lmao.
Exchanges now are sure making their own way just to cope up this bear season but asking those kind of shits is insane.

[stompix]

It's a local exchange and open only for locals of spain (probably) is one of the reasons why its not known worldwide.

They claimed to operate in 22 countries in Europe, even their extension was "global". 

Although, i'm reluctant od what you said "exchanges doesnt have many real users" when you can't see any of their records/database of registered/kyc-ed users.

In the hack last year they lost €1.2 million, and in their won statement they said that's 1/4 of their holdings, so they had under €6 million in assets for all their users which is peanuts, if they had 10k users it would mean an average of 600$...

Last July, the exchange suffered a cyber attack that saw €1.2 million ($1.45 million) in crypto assets stolen – 27% of the firm's total holdings at the time.

[hugeblack]

how stupid? Isn't it easier to make the withdrawal fee 40 USD?
This policy will break any trust that can be built.
If there is a reason to reduce the number of employees, the person who made this decision should be fired.

[noorman0]

It seems they refuse to give up and end the business. They think that only extorting $20 is at least a tolerable value and able to maintain customer solidarity. On the other hand, suspending user funds for reasons on the verge of bankruptcy is criminal.

It's interesting to follow updates on this exchange, especially how local regulations (probably) will crack down on their companies.

[Potato Chips]

They will probably make more than 20 EUR per user since not everyone will be able to withdraw. There's a tweet that the app is set to die in less than two weeks and it's not even working properly... Basing from the wayback machine snaps, this seems to be an app only exchange cause I can't see any login?

the company says its app will be fully operational until July 20 for euro bank transfers and withdrawals in BTC and ETH. Remaining balances, it says, will be transferred into euros and will be available on 2gether’s cards until their expiration date.

... However, Asufin says on its website that the 2gether website and app are blocked and not allowing users to carry out any functions.

They did say the remaining balance will be transferred to their cards but what about those who have not activated their card?. There's also a tweet (machine translated!) claiming users are charged after july 20.

The worst thing is that you cannot sell anything, and if you do not liquidate positions before July 20, they charge you another 30 € for managing them.

[Text]

2gether Spanish Exchange's obstruction of its operations was unjust and unacceptable.

It is not the fault of their users if they are already losing money, whatever their reason is not an excuse and they are committing theft.

If they want to stop the business, let their users withdraw their funds and return them.  It's not what they'll claim as a donation.

[Don Pedro Dinero]

Where the hell do these guys think they are operating, Bartovia?

Despite operating in 22 countries, they have their base and most of their clients in Spain, so, yes kind of Bartovia.`

To me this smells like Nueva Rumasa, Forum Filatélico, or the famous company Gowex, scams that also left a lot of people affected.

Shortly after announcing that they were going to charge 20 euros, they disappeared from the social networks and the website stopped working. Let's see what the media says:

'2gether will stitch up the 100,000 customers trapped in Spain's largest corralito with commissions
2gether urges customers to settle accounts to avoid surprise cancellation fees, but keeps the app to do so blocked'

Translated from Spanish from: https://www.finanzas.com/divisas/2gether-cosera-a-comisiones-a-los-100-000-atrapados-en-el-mayor-corralito-de-espana.html

It is worth bearing in mind that in the 2020 annual accounts they declared:

https://empresite.eleconomista.es/TWO-VENTURES.html donde hay varios recortes de noticias:

2GETHER's closure comes after years of losses. The platform recorded €894,000 in the red in 2020, according to its last deposited accounts, after a turnover of €892,400. Since 2020 it has been penalised by two major hacks: the first, of 1.178 million, which affected 5,400 investors and the most recent, of 6 million, last 28 December. 2GETHER acknowledges that at its last shareholders' meeting it discussed the petition for insolvency proceedings.

Translated into English with Deepl.com

[Potato Chips]

Shortly after announcing that they were going to charge 20 euros, they disappeared from the social networks and the website stopped working.

Wasn't the website already on maintenance at least a few weeks before the announcement started circulating? Just wondering since there's an "on maintenance" snapshot of them on june 15.

[tabas]

This is the problem with this type of exchanges, why they can't just allow the users to withdraw their own money. It's not the exchanges money and it's the users, why they're giving them hard time of taking back their money.
Changing policies and withdrawal fees will just result for them to lose more customers and if they're about to end it, they should keep it professional and how their customers deposited easily, they should reciprocate for withdrawals.

[Don Pedro Dinero]

Shortly after announcing that they were going to charge 20 euros, they disappeared from the social networks and the website stopped working.

Wasn't the website already on maintenance at least a few weeks before the announcement started circulating? Just wondering since there's an "on maintenance" snapshot of them on june 15.

I didn't know that but that seems to me to be one more indication that they were having problems before announcing that they were going to charge the 20 euros. The last thing I have seen is that they have called an extraordinary meeting to declare bankruptcy, so my suspicions were well founded:

2gether convoca junta extraordinaria para declararse en quiebra

To me this smells like Nueva Rumasa, Forum Filatélico, or the famous company Gowex, scams that also left a lot of people affected.

[YOSHIE]

From what I read and understand, there are some things that can be taken at the discretion of the 2gether exchange in Spain.

I've read about the bankruptcy of one of the crypto exchanges because their 'loans' suffered losses when lending Bitcoin prices around $30-40k with the agreed term of the agreement, so that with Bitcoin's current price drop of $19k, the exchange is at a loss, arguing that the initial capital is greater than the payments made by its current customers, so it has to close, they could not cover the Bank.
i think they don't consider full payment, for example: user borrow 2 BTC and return 2 BTC + interest, which they calculate the initial capital when granting the loan, what's more, certain crypto exchanges, live because of local bank loans, of course they have to pay to the bank with fiat money, not crypto.

I judge this, it may also be experienced by the 2gether exchange in Spain plus the government regulations in Spain are strict on the exchange in Spain.

[Taskford]

This is the problem with this type of exchanges, why they can't just allow the users to withdraw their own money. It's not the exchanges money and it's the users, why they're giving them hard time of taking back their money.
Changing policies and withdrawal fees will just result for them to lose more customers and if they're about to end it, they should keep it professional and how their customers deposited easily, they should reciprocate for withdrawals.

Those exchange is just looking only for fast profit and didn't want to wait for good developments to happen that's why they suffer from this consequences. And its not good to see this happening since for sure many people lose their money for their shutdown. If they could just sustain their operation and remain what they currently have to make their costumer stays as well as they run a series of promotions to survive for sure they will not be in trouble.

[milewilda]

This is the problem with this type of exchanges, why they can't just allow the users to withdraw their own money. It's not the exchanges money and it's the users, why they're giving them hard time of taking back their money.
Changing policies and withdrawal fees will just result for them to lose more customers and if they're about to end it, they should keep it professional and how their customers deposited easily, they should reciprocate for withdrawals.

Those exchange is just looking only for fast profit and didn't want to wait for good developments to happen that's why they suffer from this consequences. And its not good to see this happening since for sure many people lose their money for their shutdown. If they could just sustain their operation and remain what they currently have to make their costumer stays as well as they run a series of promotions to survive for sure they will not be in trouble.

Not really an issue if they would decide to shut down as long they do able to clear themselves up on releasing all of their users funds that stuck into their wallet and wont tend on running it away.
Its just part of the business neither you would succeed or not and exchange platforms or business isnt really an exemption for that which you would really be experiencing those outcomes.
Honestly, we do have lots of exchange platforms in the market today and we dont really need to have but its understandable for those local platforms but they should be expecting that
this is really a fierce market for them to deal off with not only on getting users but also on how to handle the business overall on a very volatile market.

[TimeTeller]

From what I read and understand, there are some things that can be taken at the discretion of the 2gether exchange in Spain.

I've read about the bankruptcy of one of the crypto exchanges because their 'loans' suffered losses when lending Bitcoin prices around $30-40k with the agreed term of the agreement, so that with Bitcoin's current price drop of $19k, the exchange is at a loss, arguing that the initial capital is greater than the payments made by its current customers, so it has to close, they could not cover the Bank.
i think they don't consider full payment, for example: user borrow 2 BTC and return 2 BTC + interest, which they calculate the initial capital when granting the loan, what's more, certain crypto exchanges, live because of local bank loans, of course they have to pay to the bank with fiat money, not crypto.

I judge this, it may also be experienced by the 2gether exchange in Spain plus the government regulations in Spain are strict on the exchange in Spain.

This will not be the last exchange that will close down during this bearish season.
So for crypto users who are still storing their coins inside the exchanges,
better transfer it to their wallets that they have full control of.
It is advisable to take precautions rather than regretting it later.

[Husires]

This action affected about 100,000 users that trusted the service of this exchange. And, their funds are held on the exchange. They went further to urge users to pay a fine of $20.35 to keep their accounts active, and failure to comply will get such account suspended. ( Maybe they'll be back in future)

Aren't these companies supposed to file for bankruptcy, as they are legal institutions that have a legal status in the law and are not just a store?
Here are samples of some of the platforms that have filed for bankruptcy:

Voyager has filed for bankruptcy in NY court. Deposits there in serious risk.
Crypto lender Celsius files for bankruptcy in New York

What prevents this situation from turning into a "exit scam"?

[Text]

~snip
What prevents this situation from turning into a "exit scam"?

Well, we don't know if a company will be an exit scam if it operates legitimately in the beginning, right? It's up to them if they do something their customers won't like especially if it's intentional. Some laws can be pursued if they are regulated, that's all, how far will it go?  Will they be held accountable if the funds are not recovered? Even simple cases, can't be handled properly and quickly, how can it be more complicated?