Hong Kong Crypto Exchange Gatecoin Choked to Death by Banking Freeze
Another crypto exchange bites the dust after being denied basic banking services. | Source: Shutterstock
Nowhere does the phrase ‘misfortunes don’t come singly’ appear to be truer than in the case of Hong Kong-based cryptocurrency exchange Gatecoin which has been hacked, had its banking accounts frozen, lost funds to a payment processor and now faces liquidation all in a span of three years.
In a statement, Gatecoin revealed that it has to ‘cease operation with immediate effect’. According to Gatecoin, its current predicament was triggered by problems it experienced with banking partners. This saw it turn to a French-regulated payments firm but it soon ran into problems with the payments processor.
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Gatecoin Bites the Dust – Thank the Bankers
Specifically, the payment service provider experienced delays in processing transactions resulting in Gatecoin’s operations being almost paralyzed for several months. The cryptocurrency exchange incurred substantial losses as a result.
Switching service providers did not help as the French-regulated payment institution still retained a significant portion of Gatecoin’s funds. Legal action has, however, not borne any fruit for the Hong Kong crypto exchange:
After months spent trying to recover those funds, we commenced legal action against that PSP [Payment Service Provider] but were advised that it is unlikely that we would be able to recover the funds from them in full.
Hong Kong Bitcoin exchange Gatecoin got scammed by a regulated payment service provider. A HK court has ordered Gatecoin to be wound up,