The year 2020 has not been so far good for cryptocurrency exchanges as there are at least 75 digital currency exchanges that have been shut down this year. Various reasons are there behind the closure of these cryptocurrency exchanges. Some of them were forced to close down by governments. Some of them were shut down voluntarily which might be due to the pandemic. Hacks or scams also led some cryptocurrency exchanges to shut their doors down. Some even got disappeared for no reason. However, in total, the number rose to 75 in the year 2020.
As per listing by Crypto Wiser Exchange Graveyard, the main reason for the shutdown of the cryptocurrency exchanges was MIA for vanishing from the web without any particular reason. There are 34 cryptocurrency exchanges in total that have been labeled as MIA. While on the other hand, 31 digital currency exchange platforms shut their doors down voluntarily because of different reasons. The COVID-19 pandemic might be one of those reasons. Four cryptocurrency exchanges were closed down because they got hacked. Two of these exchange platforms include Nerae and Altsbit.
Scams are considered to be the particular reason behind the closure of five cryptocurrency exchanges out of them. Because of government intervention, two digital asset exchanges were flagged and close down. One of them is a Dutch exchange known as NLexch while the other one is Chilean Chilebit.
Moreover, decentralized finance (DeFi)’s growth is also another major factor that is considered to be one of the prominent reasons behind the failure of some smaller crypto exchanges. As the DeFi market is growing and developing at a rapid pace, those exchanges that do not offer services related to DeFi are continuously failing to make their place in the cryptocurrency industry.
Reportedly, this number is up by 56 percent as compared to the previous year and still the year 2020 has not even ended completely. So there is likely a chance that this figure may go up further. The regulatory pressure on cryptocurrency exchanges is also increasing day by day.