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Liqui Cryptocurrency Exchange Confirms Shutdown

Benson Toti

The latest cryptocurrency exchange to bite the dust is Liqui, which officially announced this week that it would be closing its doors to crypto traders due to a lack of liquidity. Liqui.io published a heartfelt statement on its website and distributed the same message to all of its exchange users via email. It confirms that Liqui is “no longer able to provide liquidity for the Users left” on the platform.

The statement goes on rather bluntly to state that it does “not see any economic point in providing” their services. The decision was clearly a difficult one for the company to take, with its post concluding that it “broke [their] hearts” to close all active accounts and cease transactions on its exchange.

Where did the downfall of Liqui begin?

A recent change in company policy, which gave customers the option of opting in or out, did not go the way Liqui’s founders had planned, resulting in this untimely closure. According to the official announcement, all Liqui.io users with assets in their Liqui account have been given 30 days from 28th January to withdraw their funds as all accounts will be shut down after this period. Failure to withdraw assets during this timeframe will also incur a fee, as set out in Liqui.io’s Terms of Use.

It’s not yet clear whether the long-term bearish cryptocurrency markets have had an impact on Liqui’s closure. However, the company’s official statement acknowledged that the cryptocurrency market had “significantly changed since 2017”. In the hours leading up to its announcement, Liqui’s exchange had executed trades worth more than $100,000. The platform was also a staunch supporter of a string of altcoins, whilst also providing liquidity for those wanting to buy Bitcoin and Ethereum.

Blame the bearish cryptocurrency markets, say Liqui

Liqui blames the bearish cryptocurrency markets for its lack of liquidity

Open Studio/Shutterstock. Most leading cryptocurrency trading graphs have been on a downtrend since early 2018

Although Liqui’s founders have not ruled out reopening its cryptocurrency exchange in the future, their return would depend largely on whether or not the bear markets for all cryptocurrencies subside. At the end of 2018, the combined market capitalisation of all available cryptocurrencies totalled just 20% of its peak value of more than $813 billion.

In some quarters, crypto experts believe that Liqui’s closure could have a domino effect on others, leading to more exchange shutdowns throughout 2019. Ran Neuner of CNBC is “expecting more exchanges to shut down in this bear market”. Mr Neuner added that while “everyone rushed to start an exchange” in 2018, the realities of the costs required to maintain an exchange infrastructure are beginning to hit home, and he believes that “most won’t survive this”.

It has certainly been something of a rough ride for crypto exchanges so far in 2019. New Zealand-based exchange, Cryptopia, suffered a serious hacking, with $16 million worth of crypto assets stolen in the attack; some of which ended up being transferred to Binance accounts. The security risks that smaller crypto exchanges face could also lead to others closing their doors in fear of letting their customers down.

Featured image: Claudio Divizia/Shutterstock


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