Crypto and tokenized securities exchange DX.Exchange is shutting down due to economic cost issues.
The exchange, powered by NASDAQ matching engine and based in Estonia, announced yesterday that they are shutting down the platform to search for a merger, or a sell deal, since the costs of operating the platform are no longer feasible for the company to manage on their own.
The company stated that these options are the best opportunity for the exchange to “achieve success for its shareholders and compete in this challenging market.” According to the announcement, if a merger or a sale is not reached within a predetermined amount of time, the exchange will not resume operations and will be permanently shut down.
Users have been asked to withdraw their funds from the platform through a detailed KYC procedure by no later than Nov. 15 to allow a merger or a sale to proceed properly, and users will be notified if and when trading and deposits are open again.
The exchange launched at the beginning of January 2019 and it allowed its users to trade tokenized stocks of Amazon, Apple, Facebook, Google, Microsoft and Tesla, among others. Nevertheless, tokenized securities are no longer referenced on the exchange’s website.
Amidst the news, some people on social media are calling the exchange an exit scam. Regardless of the exchange setting out the process to return users’ funds, a Twitter user called the shut down an “exit scam” and referred to former DX.Exchange CEO Daniel Skowronski as the orchestrator. Skowronski allegedly left the company in October and wiped out any connection to the exchange on his social media profile.
Other redflags of the exchange’s shut down being a scam is the fact that Limor Patarkazishvili, the owner of DX.Exchange, previously owned 90% of the Israel-based binary options platform SpotOption, which was shut down in January after the Israel Securities Authority started banning binary options outside of the country. Another warning sign that the exchange might not be legitimate is their claim of being a NASDAQ-backed exchange, when in reality DX.Exchange uses NASDAQ’s Exchange Matching Engine but doesn’t have a direct agreement with the entity.
Last week was also hard on other exchanges, as cryptocurrency derivatives exchange Deribit suffered a bug in the system last Thursday which crashed the exchange’s BTC contact price 15%, causing BTC contracts to trade at $7,700 when the price of BTC was above $9,000 at that moment. On Friday, BitMEX accidentally shared its customers’ email addresses when they sent out an email update. As a result, all the recipients of the email could see the other recipients’ addresses.