Cryptocurrency exchanges are harder to run than they look. Because of this, over 75 crypto exchanges have been shut down so far in 2020, due to hacks, scams, and other reasons.
A digital currency exchange (DCE) or a cryptocurrency exchange is generally a business that allows customers to trade cryptocurrencies with other digital assets or conventional fiat money.
According to the data from Crypto Wisser Exchange Graveyard, 31 exchanges were shut down voluntarily while 34 were labeled as ‘Missing In Action’ (MIA) for disappearing with no explanation. Dutch exchanges Chilean Chilebit and NLexch, in particular, were shut down by their respective governments.
The growth of decentralized finance (DeFi) and the rise of decentralized exchanges (DEX) have put an end to many smaller exchanges. More so, regulatory pressure has also increased. Due to this, many exchanges have not been able to keep up with the requirements.
New York Stock Exchange (NYSE) President Stacey Cunningham explained that it was important for markets to remain open since closing them would only compound market anxieties.
Closing the markets would not change the underlying causes of the market decline, would remove transparency into investor sentiment, and reduce investors’ access to their money. This would only further compound the current market anxiety. (3/3)
— Stacey Cunningham (@stacey_cunning) March 16, 2020
Moreover, five exchanges were labeled as scams while four were flagged as hacked. In fact, scams and hacks are also cited as increasing issues for exchanges.
Recently, there was a filing of criminal charges against BitMEX executives for banking regulation violations. Apart from this, the Singapore-based KuCoin exchange suffered a $200 million hack in late September.
Despite having more than 70 exchanges halt their operations, there are still over 400 crypto exchanges currently working. Above all, Binance is the largest cryptocurrency exchange with over 15 million users. Its trading volume for the last 24 hours is $2.8 billion, according to CoinGecko.