Gatecoin Cryptocurrency Exchange Calls It Quits After Six Years And $2 Million Hack
Gatecoin Cryptocurrency Exchange Calls It Quits After Six Years.
Gatecoin, a Hong Kong-based cryptocurrency exchanged founded in 2013 by Aurelien Menant, a former investment banking expert, has announced it is now bankrupt and would end operations with immediate effect, according to a statement by the firm on March 14, 2019.
End Of The Road For Gatecoin
Gatecoin exchange, one of the earliest and most influential cryptocurrency trading venue and exchanges has announced it can no longer continue servicing its clients due to a prolonged issue with their banking partners.
It’s worth noting that the exchange has passed through many challenges in recent years.
In May 2016, Gatecoin cryptocurrency exchange suffered a massive heist that saw it lose 185,000 ether (ETH) and 250 bitcoin (BTC) valued at $2 million at the time, but during the crypto moon shot of 2017, the ether tokens alone were reportedly worth more than $203 million.
Reportedly, Gatecoin was one of the first regulated crypto assets exchanges, allowing users to trade established digital assets like bitcoin ether and ERC-20 tokens.
In September 2017, Gatecoin’s Hong Kong banking partners abruptly froze their account without any explanation or prior notice.
Gatecoin Survived The Scare
Fortunately for the firm, it managed to secure a deal with a new payment service provider, named Alpen Baruch, shortly after the ugly incident and resumed normal operations again.
However, Gatecoin soon ran into trouble with the new banking partner due to their high cost of processing transactions and very slow processing time.
“As you may know, following our challenges with our banking partners in September last year, we started working with a Payment Service Provider (PSP) which is a fully regulated financial institution by the French financial authorities. However. That PSP failed to process most of the transfers on time, thereby paralyzing our business for several months and caused a massive loss for us,” read the Gatecoin statement.
According to data on CoinMarketCap, as at January 2018, Gatecoin exchange could boast of at least $17 million in daily crypto transactions, but that volume has crashed significantly ever since.
“Even after we tried to mitigate our losses by replacing the inefficient PSP with better alternatives to process our clients’ transfers in September 2018, the situation failed to improve because the former PSP retained a large chunk of funds. After spending several months trying to recover our money, we took legal action against the firm but our legal advisers informed us it is unlikely that we would recover the funds in its entirety,” added Gatecoin.
Now, the firm has made it clear that the financial difficulties have made it almost impossible for it to continue servicing its customers and as such it has officially closed shop.
The team says the courts issued it a “winding-up order” on March 13, 2019, and the authorities have appointed a provisional liquidator.
“Please rest assured that will cooperate with the liquidators in order to expedite the realization and redistribution of our assets to the creditors,” concluded the Gatecoin team.