Bitcoin [BTC] exchange Gatecoin shuts down after exchange fails to recover from financial complications

 

Bitcoin [BTC] exchange Gatecoin shuts down after exchange fails to recover from financial complications

Gatecoin, the Hong Kong-based Bitcoin exchange, announced the closure of all operations indefinitely after facing multiple financial complications. The exchange was in liquidation after it failed to recover its losses suffered back in 2016 after a $2 million hack.

The development team announced that its services were suspended after the exchange struggled to stay relevant financially for months.

The exchange also dealt with the disruption of bank accounts after the 2016 hack. In September 2017, the exchange’s Hong Kong-based accounts were taken down and they had remained inactive till the date of the shutdown.

The official statement stated,

“We have suffered financial difficulty over a period time to an extent that we are no longer able to support our operation. The court on Wednesday granted a winding-up order against our company. A provisional liquidator has been appointed and we have to cease operation with immediate effect.”

Gatecoin was launched in 2013 and the exchange was dedicated to Bitcoin, Ethereum and Ethereum-based token markets. During the 2016 hack, the exchange reported that it had lost a total of 185,000 ETH and 250 BTC, worth $2.14 million of investor funds.

The exchange failed to recover the funds, but the company refused to completely shutdown after the incident. The exchange blamed a registered French payment service provider for freezing its operations.

The exchange released the following statement,

“Following our issues with our banking partners in September last year, we started working with a payment service provider [PSP] which is a fully regulated payment institution by the French regulator. However, that PSP failed to process most of the transfers in a timely manner which in turn almost paralyzed our operation for many months and caused a substantial loss on our side.”

The exchange eventually mitigated its losses, but recovery was a little too late. The situation failed to take a better stance after PSP retained a large number of Gatecoin’s funds.

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