This site is reader-supported. When you click through links on our site, we may be compensated.
Hong Kong-based cryptocurrency exchange Gatecoin will shut down and enter liquidation after an unsuccessful attempt to recover funds lost in a dispute with a former payment services provider.
Announced yesterday, the company distributed the message to customers via their corporate website. There, the team behind the project explained the suspension of the service occurred after months of battling to stay afloat, and ultimately, a court order to wind-up and cease operations immediately.
In its public statement, the company blamed its prior payment service provider (PSP) for this situation. The exchange said it began having issues with banking services in September 2018, after the sudden freeze of its bank accounts in Hong Kong.
In November last year, Gatecoin announced that it would resume operations after resorting to an unnamed European payments processor – ”a fully regulated payment institution by the French regulator” they stated – and a bank in Switzerland.
The team stated:
“Even after we managed to mitigate our loss by replacing that PSP with more reliable alternatives to process our clients’ transfers in September 2018, the situation did not improve because that PSP retained a large part of our funds.”
The exchange finished it’s message assuring customers that it expects to redistribute its remaining assets to the creditors.
Since 2016, the exchange has had a series of troubles unrelated to its banking services, as it lost 185,000 ETH and 250 BTC in a cyber attack. Still, it appears the exchange will become the latest casualty of struggles to obtain adequate financial services.
In March, Bloomberg reported on how industry startups remain unable to even open up standard checking accounts. The article profiled stories from even established cryptocurrency businesses and raised the profile of what appears to be an ongoing issue.
At press time, CoinDesk was unable to obtain the full court order detailing the liquidation process. According to a discussion on a Reddit dedicated to the exchange platform, customers, including those who say they lost funds in the 2016 hack, also appear in the dark on whether they will be reimbursed.
Read the full message below:
Gatecoin image via Shutterstock