Hong Kong-based crypto trading platform Gatecoin is ceasing operations and liquidating assets due to financial difficulties stemming from a previous dispute with the exchange’s former payment service provider (PSP).
According to the company’s announcement published March 14, Gatecoin’s inadvertent suspension of its services was attributed to previous issues with its banking services that initially began in September, prompting Gatecoin’s PSP to freeze the exchange’s accounts in Hong Kong. After struggling to stay afloat in the last several months, a court has ordered the exchange to immediately terminate its crypto trading operations.
In an effort to mitigate the exchange’s losses and resume operations, in November, Gatecoin announced that it was replacing its PSP with a European payment processor and a Swiss-based bank.
As the team explained at the time:
“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.”
While the company is now permanently shutting down, Gatecoin assured that it will be redistributing the remainder of its assets to creditors.
In 2016, Gatecoin had also sustained a cyber attack that led to the loss of over 250 BTC and 185,000 ETH worth over $2 million.
Gatecoin is one of the industry startups that have struggled to secure sufficient financial services. In March, Bloomberg has also profiled the rising number of crypto platforms that remain incapable of even opening a standard checking account, an apparently prevailing issue even among more prominent crypto-related ventures.