Liqui.io exchange - why did it have to shut down?

28 Jan, 2019 | Updated: 28 Jan, 2019
by David Robb
Analysis
Liqui.io exchange - why did it have to shut down?

Liqui.io is the first crypto exchange to shut down in 2019, citing insufficient liquidity. Here's a summary of all you need to know about the closure of this trading platform.

Why did the Liqui.io exchange have to shut down?

The official announcement from Liqui claimed that it was "no longer able to provide liquidity for the Users left. We also do not see any economic point in providing you with our services". As trading volume fell, so did the exchange's fees and commissions, until it was no longer able to provide the level of trading infrastructure it felt was worthwhile to users.

Alarm bells were raised towards the end of last year when the exchange started to mass delist tokens, including some more prominent cryptos such as WAVES. This suggested that the long-term prospects for trading on the platform were not good, as the costs of maintaining these pairs on the site were starting to outweigh any potential future gains from their trades. At one point the platform considered charging a monthly fee for users in order to stay afloat.

Read more: Liqui exchange shuts down; "no longer able to provide liquidity"

Was it an exit scam?

At the time of the mass delisting, many in the crypto community suspected that Liqui might be pulling an exit scam. This theory has come up again in the wake of the exchange's closure. The fact that HOT, a relatively small altcoin outside the top 20, temporarily made up the top 3 pairs by trading volume and accounted for 30 percent of the exchange's total trades was seen as suspicious by some.

Image from Gyazo

Read more: Liqui.io exchange faces criticism for short withdrawal notices on delisted coins

What pairs were still trading on Liqui.io?

The biggest pairs on Liqui.io were HOT/ETH and WINGS/BTC. HOT/USDT and HOT/BTC were also pretty high up in the exchange's trading volumes. 

What do traders have to do now?

Liqui advises users that still have funds on the exchange to "withdraw your Digital Assets through our website within 30 days after this message was sent. If you did not withdraw delisted Digital Assets since we announced changes in our policies, you will also have another 30 days from the date this message is sent. After 30 days we cannot guarantee that we will be maintaining our website. In this case, all withdrawals will be processed through our support https://liqui.freshdesk.com until the last user store his assets with us. Note that our Terms of Use will apply until you have your more than zero balance in our wallets. If we do not provide services we cannot store your assets for free, so the fee will apply if you fail to withdraw in accordance with our Terms of Use."

History of Liqui.io exchange:

Liqui.io was based in Ukraine, and it was launched in September 2016. The exchange became known for the large number of altcoin trading pairs that it offered. Holo (HOT), for example, could be traded with BTC, ETH and USDT. This is more pairs than even Binance could offer.


What people are saying about the closing:

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