There are numerous crypto exchanges all over the world. However, not all of them gain popularity, and some of them even stop working due to various reasons. Unfortunately, at least 75 crypto exchanges stopped to exist in 2020, due to hacks, scams or simply disappeared for unknown reasons. People should keep in mind that, the number could increase until the end of the year.
Based on the information provided by the Crypto Wisser Exchange Graveyard, 5 out of 75 exchanges were labeled as scams. Also, another four crypto exchanges ceased to exist due to hacker attacks.
Interestingly, in the case of 31 exchanges, they voluntarily closed their exchanges. Moreover, 34 of them disappeared without any apparent reasons. Interestingly, the Dutch government closed the exchange NLexch and the Chilean government closed Chilebit.
Importantly, there are some macro trends that help to explain why so many smaller exchanges disappeared from the market. The growth of DeFi and the rise of decentralized exchanges in 2020, made all but impossible for numerous smaller exchanges to retain their positions.
Crypto exchanges and risk factors
Moreover, there are other issues as well. Regulatory pressure continues to rise and many crypto exchanges are not able to adapt to the new reality. Furthermore, not only small exchanges but even major exchanges may disappear from the market.
The U.S. Department of Justice filed criminal charges against four executives of BitMex including its founder. The U.S. Department of Justice filed charges due to violations related to banking regulation. People should keep in mind that, crypto security firm Chainalysis labeled the exchange as “high risk”.
Moreover, Chainalysis issued a warning to a number of its high profile clients, including government agencies, banks, and exchanges. The crypto security firm informed them, that any exchange with legal problems should be considered high risk.
Interestingly, apart from the crypto exchanges almost 2,000 altcoins and tokens no longer exist.
The Crypto industry is evolving and some exchanges will cease to exist and new ones will enter the market.